Eli Lilly in Development Deal for Diabetes Drug

Eli Lilly will pay MacroGenics up to $494 million to develop and commercialize teplizumab, a humanized anti-CD3 monoclonal antibody now in a Phase II/III clinical trial for patients with recent-onset Type 1 diabetes.

The development deal includes other potential next-generation anti-CD3 molecules for use in the treatment of autoimmune diseases. Eli Lilly will acquire the exclusive rights to teplizumab while MacroGenics will continue to oversee the diabetes trial.

The companies have agreed that MacroGenics will receive an initial payment of $41 million plus $3 million in other committed funds. The biotech may receive up to $200 million in potential development milestones for the Type 1 diabetes indication of the drug. If it is commercialized, the company is eligible for an additional $250 million in potential sales milestones plus escalating royalties on sales.

MacroGenics also will have the option to co-promote teplizumab for certain indications in the U.S. For its part, Eli Lilly may make an equity investment of up to $10 million in MacroGenics and may decide to pursue several additional indications for teplizumab or other next-generation anti-CD3 molecules the companies develop together. If Eli Lilly pursues all of those potential indications and they all gain approval, additional milestone payments to MacroGenics could exceed $600 million.