Lilly and Zealand scrap diabetes, obesity R&D collaboration

Eli Lilly ($LLY) and Zealand Pharma (CPH:ZEAL) have scrapped their diabetes and obesity-focused R&D collaboration. The companies teamed up in 2013 to explore using novel peptides to treat Type 2 diabetes and obesity, but 21 months later have decided there is no point pursuing the program.

Zealand CEO Britt Meelby Jensen

Over those months the allies have come to the realization--mutually, according to Zealand--that the results of their shared work to date are too weak to warrant pushing ahead with development. The move marks the end of research into a Lilly-discovered, hormone-based approach to using novel peptides to lower blood glucose and body weight. And it also ends the chance, mooted when the deal was signed in 2013, that the collaboration would later be expanded to cover other drug targets and diseases.

Copenhagen, Denmark-based Zealand has responded to the end of the co-development pact--the financial terms of which were never revealed--by focusing the resources previously allocated to the alliance onto its internal peptide programs. Zealand's peptide know-how led to the Lilly deal--as well as still-active collaborations with Sanofi ($SNY) and Boehringer Ingelheim--and has given it a pipeline of partnered and in-house clinical-phase candidates, several of which have milestones coming up over the next 12 months.

Data from a Phase I trial of stable glucagon agonist ZP4207 in diabetics suffering from severe cases of hypoglycemia are due by the end of the quarter, somewhat earlier than expected originally. Zealand is also working on a proof-of-concept trial for its lead candidate, danegaptide. The Phase II trial is assessing the ability of the drug to prevent cardiac tissue damage following an acute myocardial infarction. Data are due early in 2016.

- read the release

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