By Brady Huggett

Alkermes Inc. and Eli Lilly and Co. are collaborating on the development of an inhaled formulation of insulin using Alkermes' AIR pulmonary drug delivery system, the second AIR collaboration between the two.

The mutually exclusive agreement includes short-acting and long-acting insulin, and other potential products for the treatment of diabetes. Specifics were not released, but Alkermes will receive funding for product and process development activities, milestone payments and royalties based on product sales. Lilly receives exclusive worldwide rights to resulting products and will be responsible for conducting trials, securing regulatory approvals, large-scale manufacturing and worldwide marketing.

The companies agreed to work together on an inhaled delivery method for human growth hormone in a similarly structured deal in February 2000. (See BioWorld Today, Feb. 9, 2000.)

"We've worked with them before and we have a good relationship," said Rebecca Peterson, director, investor relations at Cambridge, Mass.-based Alkermes. "They have had a chance to evaluate the AIR technology."

"The Alkermes AIR system is expected to be able to handle sustained release," said Terra Fox, manager of financial communications at Eli Lilly. "All the others are expected to deliver only short-acting." Fox added that the Alkermes device is convenient, something that is important if a product is to be preferred over other inhalation devices used by diabetics.

Eli Lilly, of Indianapolis, recently terminated a deal concerning pulmonary inhaled technology with Dura Pharmaceuticals Inc., of San Diego, Fox said, but said the decision to sign with Alkermes was made independently. Dura was purchased by Elan Corp. plc, of Dublin, Ireland, in September. (See BioWorld Today, Sept. 13, 2000.)

Putting Eli Lilly, known for its work with insulin, with Alkermes AIR technology is synergistic, said Peterson.

"We are delighted to be working with [Eli Lilly] on the development of pulmonary insulin," Peterson said. "They are world leaders in sales and marketing of injectable insulin and other products used by diabetics. This relationship leverages both our areas of expertise."

The AIR - Advanced Inhalation Research - technology delivers low-density drug particles into the lungs. The system uses a small inhaler device, can deliver a range of drug doses and has the potential to provide sustained-release delivery. It also could provide choices, Peterson said.

"The device is simple, inexpensive and user friendly," she said. "I think it may be an alternative for patients, rather than taking daily and multiple injections. It will give people an alternative."

Like with many deals, Peterson said there is a chance the collaboration could go beyond insulin, but for now the companies remain focused on getting "a product on the market."

Alkermes has seven programs either in the clinic or on the cusp of clinical trials. It expects, together with Genentech Inc., of South San Francisco, to move into pivotal Phase II/III trials with Nutropin Depot in adults with growth hormone deficiency by the end of the second quarter, Peterson said. Medisorb Naltrexone, its product to treat alcoholism and opiate addiction, has completed Phase I trials. And the anti-psychotic drug Risperdal, partnered with Janssen Pharmaceutica NV, of Beerse, Belgium, has completed Phase III trials and is out of the clinic now. Peterson said Alkermes is "aggressively preparing" the new drug application filing for that product.

With the signing of the collaboration on insulin, Peterson said it's a job well done.

"Our goal was to generate clinical data to attract a high-caliber partner such as Eli Lilly," she said. "This deal is a validation of the proprietary AIR technology."

Alkermes' stock (NASDAQ:ALKS) gained 62.5 cents Monday to close at $22.562. n

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