Eli Lilly to collaborate with AC Immune for the treatment of Alzheimer’s disease

Eli Lilly (NYSE: LLY) partners with Switzerland-based AC Immune (Nasdaq: ACIU) to research and develop the potential treatment for Alzheimer’s disease and other neurodegenerative diseases. Lilly will pay an initial upfront payment of CHF80 million and CHF60 million to AC Immune on achieving near-term development milestones.

AC Immune will also receive low double-digit royalties and other potential milestone payments of up to CHF1.7 billion. Lilly will spend $50 million for a note that can be converted to equity position in AC Immune.

The clinical-stage biopharmaceutical company will conduct the initial Phase 1 development of the drug, while the Indianapolis-based pharma giant will monetize and conduct further clinical development. Lilly will receive global commercialization rights of Alzheimer’s treating drug.

AC Immune’s CEO Andrea Pfeifer stated that Lilly’s considerable experience in neurology, and particularly in Alzheimer’s disease, will add substantial value to the company. He added that AC Immune’s pipeline features nine therapeutic and three diagnostic product candidates with five product candidates currently in clinical trials.

Eli Lilly tops market estimates; revises guidance

So far the pharmaceutical companies, who had tried to find a treatment for Alzheimer’s disease, have failed in their efforts. In February this year, Merck (MRK) stopped its Alzheimer’s Phase 3 trial after its BACE1 drug failed. In January, Pfizer (PFE) abandoned its efforts to discover new drugs for Alzheimer’s and Parkinson’s diseases. Biogen’s (BIIB) Alzheimer’s drug aducanumab is now in the final stage of testing.

Eli Lilly stated that its 2018 non-GAAP EPS outlook will not change because of this transaction. On Wednesday, AC Immune’s shares opened up 3% at $11.89, while shares of Lilly opened flat. At midday, ACIU stock had gained 4% and shares of LLY were up about 1%.

We’re on Apple News! Follow us to receive the latest stock market, earnings and financial news at your fingertips