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Lilly Licensing Autoimmune Therapy in $400M Deal

Nektar Therapeutics lab

Nektar Therapeutics lab in San Francisco (Nektar Therapeutics)

24 July 2017. Drug maker Eli Lilly and Company is licensing a therapy from a biotechnology company that produces self-correcting cells for people with disorders caused by a malfunctioning immune system. The agreement with Eli Lilly, in Indianapolis, could bring San Francisco-based Nektar Therapeutics as much as $400 million.

The deal covers Nektar Therapeutics’ program for autoimmune diseases, disorders that arise from an erroneous immune response aimed at healthy cells and tissues in the body, instead of invading pathogens from outside. Examples of autoimmune disorders are type 1 diabetes, rheumatoid arthritis, lupus, psoriasis, Crohn’s disease, and multiple sclerosis. American Autoimmune Related Diseases Association cites data from National Institutes of Health estimating 23.5 million people in the U.S. suffer from autoimmune diseases, but the organization believes the actual number may be more than twice as high.

Nektar develops treatments that combine polymer chemistry with active biological agents to control their targeting, distribution, and activity in the body, in what the company calls polymer drug conjugates. Nektar’s drug, code-named NKTR-358, uses that formulation to balance the overabundance of effector T-cells, white blood cells in the immune system programmed to immediately react to perceived invaders. That balance is achieved by targeting interleukin-2 receptor proteins to produce more regulatory T-cells, which help control over-reactions to immune-system threats.

NKTR-358 is taken as a self-administered injection 1 or 2 times a month. An early-stage clinical trial with 50 individuals is planned for later this year to test its safety, dosage levels, and chemical activity in the body. Participants in this case are expected to have systemic lupus erythematosus, the full name for lupus. This disease leads to inflammation in the joints, skin, and other organs including heart, lungs, and kidneys, and is more common in women than men, affecting people between the ages of 10 and 50.

The agreement calls for Lilly and Nektar to collaborate on development of NKTR-358 beyond this early-stage trial. For intermediate-stage trials, Lilly will cover 75 percent of the drug’s development costs, with Nektar responsible for the remainder. Nektar has an option to participate in late-stage trials for individual diseases. Lilly will be responsible for commercialization of NKTR-358 worldwide, although Nektar will have an opportunity to co-promote the drug in the U.S. under specified, but undisclosed, conditions.

The deal calls for Nektar to receive an initial payment from Lilly of $150 million, with Nektar eligible for another $250 million after achieving certain developmental and regulatory milestones. Nektar will also be eligible for royalties on sales of products created from NKTR-358, dependent in part on the extent of Nektar’s participation in late-stage clinical trials.

Lilly has a number of drugs in its pipeline for autoimmune disorders in regulatory review and later-stage clinical trials, including rheumatoid arthritis, type 1 diabetes, psoriasis, and lupus, as well as several immunology therapies in early-stage trials.

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