Hutchison China MediTech (HCM) and Eli Lilly (LLY) have announced an amendment to the 2013 License and Collaboration Agreement on Fruquintinib.
The 2020 Amendment covers the expansion of Chi-Med’s role in the commercialization of Elunate (fruquintinib capsules) in China.
Under the terms of the 2020 Amendment, Lilly will maintain the exclusive commercialization rights, and will continue to consolidate the sales of Elunate in China. Chi-Med will collaborate with Lilly in commercializing Elunate across China.
“After many years of constructive and successful collaboration, Lilly and Chi-Med believe that this agreement now establishes the optimal structure that will allow us to leverage the full resources of both companies to maximize the potential of Elunate in China” commented Christian Hogg, CEO of Chi-Med and Julio Gay-Ger, President of Lilly China.
Starting October 1, 2020, Chi-Med will be responsible, through its commercial team in oncology of over 320 staff, for the development and execution of all on-the-ground medical detailing, promotion and local and regional marketing activities in China for Elunate.
Lilly and Chi-Med will continue to collaborate in the formulation and execution of national marketing strategy and events in China for Elunate, the companies said.
Chi-Med and Lilly will share gross profits linked to sales target performance. Subject to meeting pre-agreed sales targets, Lilly will pay Chi-Med an estimated total of 70% to 80% of Elunate sales in the form of royalties, manufacturing costs and service payments. There is no upfront payment by Lilly or Chi-Med relating to this amendment.
Fruquintinib is a highly selective and potent oral inhibitor of vascular endothelial growth factor receptor (“VEGFR”) 1/2/3. The generally good tolerability in patients to date, along with fruquintinib’s low potential for drug-drug interaction based on preclinical assessment, suggests that it may also be highly suitable for combinations with other anti-cancer therapies.
Fruquintinib was approved for marketing by the China National Medical Products Administration (“NMPA”) in September 2018 and commercially launched by Lilly in late November 2018 under the brand name Elunate.
Shares in Chi-Med are up 6% year-to-date, while Lilly is up 22%. Wall Street analysts are cautiously optimistic about Lilly’s stock outlook. The Moderate Buy consensus is split between 4 Buy rating versus 3 Hold ratings. In light of the recent share rally, the $173 average price target implies 8% upside potential in the shares in the coming 12 months. (See Eli Lilly’s stock analysis on TipRanks).
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