Lilly pays $50M-plus for rights to testosterone lotion

Eli Lilly and Co., the maker of the impotence drug Cialis, bought exclusive rights from Acrux Ltd. to an underarm testosterone
lotion called Axiron for men with limited sex drive due to low levels of the hormone.

Indianapolis-based Lilly will pay Acrux of West Melbourne, Australia, a $50 million license fee, plus $3 million when manufacturing
assets are transferred, the companies said Monday in a statement. Acrux may earn $87 million more if U.S. regulators approve
the drug for marketing, $195 million in commercial milestone payments as well as royalty payments on future sales, the companies
said.

Acrux filed a marketing application with the U.S. Food and Drug Administration in January in an effort to enter a global
market for testosterone therapies valued at more than $1 billion a year. More than a third of American men older than 45 years
have low testosterone, doctors found in a 2006 study.  The condition can sap sex drive and cause impotence, osteoporosis
and memory loss, according to the Mayo Clinic in Rochester, Minn.

“The addition of Axiron reinforces Lilly’s commitment to men’s health and, if approved, could provide a
new treatment option for men suffering from low testosterone,” said Bryce Carmine, president of Lilly’s Bio-Medicines.

Results of a clinical trial released in September showed Acrux’s lotion, called Axiron, normalized testosterone levels
in 84 percent of men after four months.

Acrux, which has never made a profit, was spun off from Monash University a decade ago and now has the chance to make a profit
and provide dividends to shareholders, Ross Dobinson, the company’s chairman, said in a statement released Monday.

The company’s agreement with Lilly is “believed to be the largest licensing deal ever stuck by an Australian
biotech company,” Dobinson said.

Please enable JavaScript to view this content.

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.