Amylin sues Lilly over drug development deal

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Amylin Pharmaceuticals Inc. said Monday it filed a lawsuit against Eli Lilly and Co., accusing the larger drugmaker of breaking their commercialization deal for diabetes drugs by teaming with the German company Boehringer Ingelheim to develop and sell a competing product.

Amylin, which is based in San Diego, said Indianapolis-based Lilly is engaging in anticompetitive behavior by planning to develop and sell Boehringer's linagliptin, a treatment for adults with type 2 diabetes. Amylin and Lilly entered an agreement in 2002 to develop and sell the type 2 diabetes treatment Byetta, which has the generic name exenatide.

The two companies also are seeking regulatory approval for a longer-lasting version of Byetta called Bydureon.

Type 2 is the most common form of diabetes. People with the disease have trouble breaking down carbohydrates because their bodies have become resistant to the protein insulin. They are at higher risk for heart attacks, kidney problems, blindness and other serious complications.

Amylin plans to continue working with Lilly, but it wants to keep Lilly from using the same sales force to sell both Byetta and linagliptin, which goes by the brand name Tradjenta. It said in a brief statement it had partnered with Lilly to "maximize" sales of its exenatide products.

"We are disappointed that we could not resolve this matter amicably and that we were forced to bring legal action to protect our rights, our products and our shareholders," Amylin said in a statement.

Lilly said in a separate statement the lawsuit is without merit, and the company will "vigorously defend its position." It also said it remained committed to the Amylin collaboration.

Amylin spokeswoman Anne Erickson declined to comment on the litigation beyond her company's statement. She said in an email her company filed its complaint under seal because of confidentiality provisions in its collaboration with Lilly.

Lilly said in January it would pay Boehringer about $387 million as part of a joint bid to develop and sell up to five drugs. The companies will split revenue from any approved drugs, not counting costs for making and selling the product. Each drugmaker also will receive payments based on whether their products reach certain milestones, like submissions for approval.

Earlier this month, the Food and Drug Administration approved linagliptin. Lilly officials said in January linagliptin and another Boehringer drug that could be submitted for approval in 2013 can generate a "long revenue stream" for their company.

Lilly can use the help. It loses U.S. patent protection in October for its top seller, the anti-psychotic Zyprexa. That will expose a drug that brought in more than $5 billion last year to generic competition.

Lilly also faces the loss of patents protecting key drugs like the antidepressant Cymbalta, its second-best seller, in the next few years, and analysts have expressed doubt that the company can fill that looming void.

But the company also faces a competitive market in trying to gain more revenue from Type 2 diabetes drugs. Merck & Co. Inc. and Bristol-Myers Squibb Co. already market drugs similar to Tradjenta in the United States.

Last year, Lilly brought in $23.08 billion in revenue and had eight drugs surpass $1 billion in sales. Amylin, in contrast, has one other drug on the market aside from Byetta, the diabetes treatment Symlin.

Amylin shares plunged in early March after the companies said Bydureon proved inferior to a daily dose of Novo Nordisk's Victoza, according to early indications of a late-stage study comparing the drugs. Alkermes Inc. of Waltham, Mass., also is involved in the development of Bydureon.

Lilly and Amylin have been rebuffed twice in their bid for U.S. approval of Bydureon, but won the backing of European Union regulators for the product in April.

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