Eli Lilly Inks $870M Deal with Camurus for Long-Acting Obesity and Diabetes Drugs

Eli Lilly has entered into a licensing agreement with Swedish biotechnology firm Camurus, potentially worth up to $870 million, to develop long-acting versions of its obesity and diabetes medications. The collaboration aims to extend Lilly's dominance in the rapidly growing cardiometabolic health market by leveraging Camurus' FluidCrystal technology to create injectable treatments with extended durability.

Deal Structure and Technology

Under the terms of the agreement, Lilly will pay Camurus up to $290 million in upfront, development, and regulatory milestone payments. An additional $580 million is tied to sales-based milestones, along with mid-single-digit royalties on global net product sales.

Camurus' FluidCrystal technology allows for the methodical release of therapeutic substances over extended periods. After injection, the lipid-based solution transforms into a liquid crystalline gel upon contact with bodily fluids. This gel encapsulates the active ingredient, slowly degrading to release the medicine over days, weeks, or even months.

Lilly can apply this long-acting technology to up to four of its compounds, including dual GIP and GLP-1 receptor agonists, triple GIP, glucagon and GLP-1 receptor agonists, and potentially amylin receptor agonists. This flexibility allows Lilly to potentially enhance its existing products, such as Mounjaro (tirzepatide) for diabetes and Zepbound for obesity, as well as develop new long-acting formulations for pipeline candidates like the Phase III triple agonist retatrutide.

Market Context and Competition

The deal comes amid intense competition in the obesity and diabetes drug market. Lilly and its chief rival, Novo Nordisk, have seen remarkable success with their GLP-1 medicines, generating billions in sales. In the first quarter alone, Lilly's Mounjaro and Zepbound brought in over $6 billion in revenue.

However, both companies face mounting pressure from competitors developing newer and potentially superior options. Amgen recently initiated Phase III trials of MariTide, a once-monthly dual GLP-1 receptor agonist and GIP receptor antagonist. Novo Nordisk has partnered with Ascendis Pharma to develop a once-monthly GLP-1 drug, agreeing to pay up to $285 million in upfront and milestone payments.

Other notable developments include Regeneron's recent $80 million upfront payment for ex-China rights to a GLP-1/GIP receptor agonist, and Roche's $1.65 billion deal to expand its obesity pipeline. Metsera and Viking Therapeutics are also advancing potential rival treatments into late-stage studies.

Implications for Lilly's Pipeline

This collaboration with Camurus significantly bolsters Lilly's cardiometabolic portfolio. The company's pipeline already includes promising candidates such as retatrutide (GIP/GLP-1/glucagon receptor agonist), orforglipron (oral GLP-1 agonist), and eloralintide (amyloid receptor agonist).

Lilly recently reported success in a Phase III trial of orforglipron, demonstrating "injectable-like" effects in an oral formulation. The company is also exploring higher doses of tirzepatide and investigating its potential in other indications, such as metabolic dysfunction-associated steatohepatitis (MASH).

By incorporating Camurus' long-acting delivery technology, Lilly aims to differentiate its products through less frequent dosing schedules, potentially improving patient compliance and quality of life. This strategic move could help Lilly maintain its leadership position in the face of increasing competition and evolving patient needs in the obesity and diabetes markets.