Eli Lilly has a blockbuster diabetes drug, dulaglutide (Trulicity), which helps the body make more insulin. But that drug, and others in the same class, are injectables. A number of companies are trying to offer patients a pill alternative.
Lilly (NYSE: LLY) now has a new pill drug candidate in its pipeline. The Indianapolis pharmaceutical giant has acquired rights to a Chugai diabetes drug that is ready to begin Phase 1 studies as a treatment for type 2 diabetes. According to deal terms announced late Thursday, Lilly will pay Tokyo-based Chugai $50 million up front in exchange for worldwide rights to the drug, OWL833. Lilly would be responsible for additional payments if the drug hits development milestones. It would also pay Chugai royalties from sales if the drug reaches the market.
The Chugai drug is a GLP-1 receptor agonist. GLP-1 drugs, including Lilly’s dulaglutide and those on the market from other companies, mimic the effects of a hormone, GLP-1, that the intestine releases in response to food to prompt the body to produce insulin. The newest one is semaglutide (Ozempic), a once-weekly injectable from Novo Nordisk (NYSE: NVO) that the FDA approved last December. GLP-1 drugs are made from peptides, short chains of amino acids, and must be injected because peptides can’t hold up against the body’s digestive system.
Novo Nordisk is trying to take diabetes market share from Lilly and others that are selling injectable GLP-1 drugs. But the Danish company is already leading the race to develop a GLP-1 drug in a pill form. In February, it announced that a pill version of semaglutide hit the main goals of its first late-stage study. The most common side effect reported was mild to moderate nausea. Novo Nordisk, which has U.S. headquarters in Plainsboro, NJ, R&D operations in Seattle, and drug manufacturing in Clayton, NC, said at the time it expected to file for regulatory approval in 2019.
The Chugai drug is a non-peptide molecule. Preclinical results published in the journal Diabetes in July showed that insulin levels increased in monkeys injected with the Chugai drug. The increase in insulin levels was the same as what was observed in tests of the AstraZeneca (NYSE: AZN) drug exenatide (Byetta), the study said. No critical toxicity findings were reported in tests of the Chugai drug in rats or monkeys.
Dulaglutide generated more than $2 billion in 2017 revenue, making it the second-highest selling product in the Lilly diabetes portfolio behind only Humalog, the company’s form of insulin. In a prepared statement, Daniel Skovronsky, Lilly’s chief scientific officer, said the Chugai drug was part of “the next generation of diabetes therapies.”