Lilly makes moves in China

Lilly sells antibiotics and manufacturing facility to Eddingpharm, which will distribute the antibiotics in China

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INDIANAPOLIS; SUZHOU and HANGZHOU, China—Yesterday, Eli Lilly and Company announced an agreement to sell the Chinese rights for two legacy Lilly antibiotic medicines, Ceclor and Vancocin. Lilly has also sold a manufacturing facility which produces Ceclor in Suzhou, China to Eddingpharm, a China-based specialty pharmaceutical company.
Ceclor, marketed in China since 1993, is an oral antibiotic that is used globally. Vancocin, which entered China in 1996, treats MRSA (methicillin-resistant Staphylococcus aureus). Lilly has said it hopes the relationship with Eddingpharm raises the revenues for the drugs. The company reportedly plans to introduce ten new drugs in China over the next decade, and wants to focus its resources on other novel products, both established and new-to-China.
“Lilly remains committed to improving the health of people in China,” said Julio Gay-Ger, president and general manager of Lilly China. “This transaction will enable Lilly China to better focus our resources on the exciting new therapies that we are launching in our core therapeutic areas, so that we can bring more life-changing medicines to patients in China.”
Under the terms of the agreement, Lilly will receive a deposit of $75 million, followed by a payment of $300 million upon successful closing of the transaction. As part of the transaction, all employees at the Ceclor manufacturing facility and certain employees from shared functions will be offered the opportunity to remain at the facility and continue to work with Eddingpharm. Lilly will provide ongoing services to Eddingpharm for a period of time, to ensure continuity of product supply and to support the smooth transition of the facility.
The transaction is expected to close in either the latter part of 2019 or early 2020, subject to customary closing conditions and regulatory approval. The transaction won’t be reflected in Lilly’s reported results and financial guidance until closing.
“Ceclor and Vancocin have been on the Chinese market for more than two decades, treating numerous patients and earning the trust of patients and physicians alike. We are very proud to acquire these two brands and to carry on their legacy,” mentioned Xin Ni, CEO of Eddingpharm. “We look forward to maintaining high standards of operation, supplying products with the best quality, and serving more patients in need in China.”
Lilly previously announced in late March that the company had signed an exclusive agreement with Transcenta Holding’s wholly-owned subsidiary, HJB, to license a portfolio of novel biotherapeutics programs in the therapeutic area of bone diseases for development and commercialization in Greater China. This includes the Phase 2-completed Blosozumab, a humanized antibody to sclerostin.
“We are excited to sign this license agreement with Lilly, a global leader in innovative medicines with successful experience in the area of osteoporosis. This license demonstrates our commitment to developing innovative medicines to meet unmet medical needs in China,” emphasized Transcenta’s executive chairman Dr. Jonathan Zhao in a press release.
Transcenta will be responsible for the overall preclinical/clinical development, regulatory filing and manufacture of these biologic therapeutics. As part of this transaction, Lilly will receive an upfront payment in cash plus equity shares in Transcenta, and will be eligible for potential regulatory and sales milestones, and commercial royalty payments.
Lilly vice president of diabetes and metabolic research Ruth Gimeno, Ph.D., noted that "We believe this transaction with Transcenta offers a great opportunity to potentially help patients in China that have osteoporosis and other bone issues.”
Blosozumab has been studied by Lilly as a potential treatment for osteoporosis, and is expected to enter clinical trials in China next year. Several other novel biologic assets intended to treat bone diseases in earlier preclinical development stages are also included in this deal.
“China has a large number of patients with severe osteoporosis at risk of fracture,” added Transcenta’s chief executive officer Dr. Xueming Qian. “Our expertise in bone disease research and clinical development, process and manufacturing capability for antibody therapeutics, and strong investor support make us an ideal company to commercialize this innovative product in China.”

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