Amylin and Eli Lilly Split Partnership

Pharmaceutical giants Amylin Pharmaceuticals Inc. (NASDAQ:AMLN) and Eli Lilly (NYSE:LLY) said on Tuesday that they are putting an end to their drug development collaboration that was meant to work on new diabetes drug.

The announcement was made on Tuesday and led to the fall in the stock prices of Amylin. Another announcement was made about the two drug makers resolving a lawsuit that was earlier filed by Amylin against Eli Lilly for starting an agreement with Boehringer Ingelheim, the German drug manufacturer.

The stocks of Amylin fell by more than fifteen percent on the New York Stock exchange by mid day to a low of $9.23. The shares of Lilly climbed by 36 cents to around $38.71.

The partnership between Amylin and Lilly was worth a lot to San Diego based Amylin. Amylin has currently only two products on the market and required the partnership to bring its diabetes drug in the market. The split up of the partnership will give Lilly a surge of capital infusion. Lilly’s partnership with German drugmaker, Boehringer is set to help the company. Lilly just like many other drug manufacturers is facing numerous drug patent expirations, which will lead to facing revenue losses.

Amylin as part of the split up will pay around $250 million to Lilly and has also said that it will assume complete responsibility for the sale of Bydureon and Byetta, the type 2 diabetes drugs.  Amylin will be handling the sales on Byetta in United States till the end of 2013.

Byetta is taken twice a day and Bydureon is the same drug that is taken one a week for keeping blood glucose levels under control for Type 2 diabetes. Bydureon gained approval in Europe in the beginning of the year, however the drug failed to gain approval in United States with the Food and Drug Administration denying the drug an approval. The FDA asked for more additional information on the drug and its effects. The two companies are expecting to obtain approval of the drug by January next year from the FDA.

Amylin has also agreed to pau 15 percent of the global sales to Lilly for the sale of Bydureon and Byetta. The agreement is set to expire if Bydureon fails to receive approval from the FDA in United States. Lilly last year announced around $430.6 million in annual sales from Byetta.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.