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Lilly licenses Xigris rights to new biotech firm

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Eli Lilly and Co. has agreed to license the U.S. marketing rights of its slow-selling sepsis drug Xigris to a newly created biotech company that will seek to reinvigorate sales of the medication, the Indianapolis-based drugmaker announced Monday morning.

The new company, BioCritica Inc., will be based in central Indiana and will be jointly owned by Lilly and two private investment firms: New Jersey-based Care Capital LLC and North Carolina-based NovaQuest Capital Management LLC.

The company will be led by David Broecker, who managed Lilly manufacturing operations in Germany and Ireland before becoming CEO of Alkermes Inc., a Massachusetts-based drug development firm.

A “handful” of Lilly employees will leave Lilly to join BioCritica, Broecker said. He expects the company to employ 20 to 25 people by year's end and as many as 70 by 2015.

The deal was structured with help from Indianapolis-based BioCrossroads, a life sciences business development group. Also, the Indiana Economic Development Corp. committed $2.9 million in tax credits and $175,000 in training grants.

BioCritica hopes to be able to do the clinical trial work necessary to develop Xigris for additional uses other than its treatment of severe sepsis in hospital patients. Within Lilly, Xigris was well down the priority list to get time from scientists and other staff.

“It’s a good way for the molecule to get some resources that it might not otherwise be able to get [inside Lilly],” said Lilly spokesman Mark Taylor.

Lilly, which is trying to find new drugs to replace aging blockbusters, has nearly 70 molecules in clinical trials, and is desperately seeking drugs that can produce annual sales of $500 million or more.

Xigris’ low-priority status within Lilly has much to do with its rather paltry sales, which totaled $104 million last year, down 18 percent from the previous year.

Xigris was the first drug Lilly launched after it lost patent protection on its best-seller Prozac in 2001. It is the only drug approved in the United States to fight severe sepsis. Lilly fought a long legal battle over the drug's patent with Massachusetts-based Ariad Pharmaceuticals Inc.

Expectations for the drug were initially huge, with some Wall Street analysts predicting annual sales of $2 billion. But the drug struggled after U.S. regulators approved the drug for a small category of patients, and because hospitals struggled to identify which patients and in which situations the drug was appropriate.

But Broecker hopes a new clinical trial Lilly sponsored, which is scheduled to produce results by year's end, will clear up that confusion.

"We believe if it's favorable, it will allow us to go out and essentially re-energize the marketplace," Broecker said.

BioCritica also plans to license and sell other drugs for use in critical care patients in hospitals.

“We are confident that BioCritica will help realize the full potential for Xigris while working to develop new critical care medicines,” said Lilly CEO John Lechleiter, in a statement.

Lilly did not disclose the financial terms of the deal, nor how much equity it will hold in BioCritica. Tayor said BioCritica will have an option to acquire the international rights to Xigris at a later date.

Taylor said the deal will have minimal impact on Lilly’s work force, since Xigris is manufactured by third-party firms and is sold via a contract sales force. Lilly does and will continue to do the packaging of Xigris.

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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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