Eli Lilly and Company and AC Immune SA, a Lausanne, Switzerland-based biopharmaceutical company, have formed an agreement to research and develop tau aggregation inhibitor small molecules for the potential treatment of Alzheimer’s disease (AD) and other neurodegenerative diseases in a deal worth up to $1.9 billion ($130 million upfront, $60 million in near-term milestones and $1.7 billion in other potential milestones).

The collaboration combines AC Immune’s proprietary Morphomer platform technology with Lilly’s clinical development experience and commercial capabilities in central nervous system disorders. The Morphomer platform uses rational chemical design to generate small molecules, so called Morphomers, which bind specifically to misfolded proteins, break up neurotoxic aggregates and inhibit their aggregation and seeding, according to information from AC Immune. The collaboration will focus primarily on AC Immune’s lead molecule, which has demonstrated tau aggregation inhibition in preclinical models, according to the companies.

Under the agreement, AC Immune will receive an upfront payment of CHF 80 million ($80 million) as well as $50 million in exchange for a note, convertible to equity. AC Immune is also eligible to receive CHF 60 million ($60 million) in potential near-term development milestones, as well as other potential development, regulatory, and commercial milestones up to approximately CHF 1.7 billion ($1.7 billion), and tiered royalty payments in the low double digits.

AC Immune will conduct the initial Phase I development of the Morphomer tau aggregation inhibitors while Lilly will fund and conduct further clinical development. Lilly will receive worldwide commercialization rights for the tau aggregation inhibitors in the area of Alzheimer’s disease. AC Immune has retained certain development rights in orphan indications and co-development and co-promotion options in certain indications outside AD.

This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Source: Eli Lilly and Company