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Settlement clears way for Lilly to launch once-a-day insulin

September 28, 2015

Eli Lilly and Co. announced Monday that it struck a deal with a French drugmaker to launch a competing version of the diabetes drug Lantus at the end of next year.

The settlement with France-based Sanofi SA clears up uncertainty over a drug that could rack up more than $1 billion in sales by 2020, according to Wall Street analysts.

Under terms of the settlement, Indianapolis-based Lilly and its partner on the drug, Germany-based Boehringer Ingelheim GmbH, can sell their once-a-day insulin glargine, injected via pen-like devices, in the United States on Dec. 15, 2016. The drug is a copycat version of Lantus known as a biosimilar.

The drug, known as Basaglar in the United States and Abasaglar in Europe, had been hung up in a court fight over Sanofi’s patent rights to Lantus. Sanofi’s lawsuit against Lilly and Boehringer had triggered an automatic 30-month stay of U.S. market approval for Basaglar.

The U.S. Food and Drug Administration gave tentative approval to Basaglar in August 2014, pending the outcome of the patent litigation.

That stay was set to expire in mid-2016. So the deal guarantees Sanofi roughly six additional months of exclusivity for Lantus in the United States, but also guarantees that Lilly and Boehringer will get their drug onto the U.S. market, regardless of how and when a court would have ruled on the patent issues. The deal also resolves all patent litigation in any other market.

"The settlement agreement ends the legal dispute between Lilly and Sanofi and provides us with certainty as it relates to our U.S. launch timing," Michael Harrington, Lilly's general counsel, said in a written statement. "This enables us to focus our efforts on preparing to successfully market and launch Basaglar in the U.S. in December of 2016."

Also, as part of the settlement, Lilly will pay royalties to sell Basaglar globally  in its Kwikpen injection devices. Neither Lilly nor Sanofi disclosed the amount of those royalty payments.

Indianapolis-based Lilly launched its version of Lantus in the United Kingdom in August and said it would start selling the drug in other European markets through the remainder of the year.

Lantus is Sanofi’s best-selling drug and revolutionized insulin therapy after its launch in 2000. Last year, Sanofi pulled in more than $7 billion from the drug.

Wall Street analysts expect Basaglar to become a blockbuster in its own right, although not on the scale of Lantus. Lilly also must split the revenue from Basaglar with Boehringer as part of a co-development agreement.

Dr. Tim Anderson, a pharmaceutical analyst at Bernstein Research, estimates that Basaglar will bring in $1.3 billion in sales in 2020, with Lilly and Boehringer splitting those proceeds 50-50. That puts Lilly’s take at $660 million annually.

Jeffrey Holford, an analyst at Jefferies & Co., estimates Lilly’s annual share at $850 million in 2020, implying overall sales of Basaglar at $1.7 billion.

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