Two major pharmaceutical companies, Amylin Pharmaceuticals Inc (“Amylin”) and Eli Lilly and Company (“Lilly”), announced today their plans to terminate a decade long collaboration, deciding it was in the interest of both parties to do so. Together, they accomplished many crucial milestones that helped people who suffer from diabetes.

Given their reputation of providing innovative medicine at a low cost, both companies wish to split from each other with as little turbulence and friction as possible in order to maintain patient well-being.

Their alliance achieved numerous innovations in the diabetic market. Amylin Pharmaceuticals and Eli Lilly and Company jointly developed and launched BYETTA® (extenatide), approved by the FDA in April of 2005 as adjunctive therapy to improve control in blood sugar for patients with type two diabetes. This treatment alone has been utilized by approximately 1.8 million diabetic patients worldwide. BYDUREON, an investigational drug that delivers continuous amounts of extentide in a single dose, was authorized in June of 2011 for marketing in Europe.

Earlier this year in May of 2011, the company Amylin Pharmaceuticals filed a lawsuit against Eli Lilly and Company. Amylin alleged that Lilly engaged in unlawful and anticompetitive behavior by commercializing a product made by German drug company Boehringer Ingelheim GmbH that would directly compete with BYETTA. Amylin stated that such an alliance with Boehringer would breach the pacts it had made with Lilly. As a result, a restraining order was placed against Eli Lilly given its plans to use the same sales force for linagliptin as for BYETTA.

Later, however, in June 2011, these restrictions were lifted when the court denied a preliminary injunction request by Amylin.

The resolution, announced today, goes as follows - Amylin will make a one time upfront payment of $250 million to Lilly and make future revenue payments of 15 percent of global profits for the net sale of BYETTA to Lilly until those payments accumulate to 1.2 Billion dollars, plus any interest acquired. Amylin will issue a secure note of 1.2 billion which can be reduced via any revenue sharing payments made to Lilly.

If Amylin’s drug BYDUREON( exenatide for extended-release injectable suspension) does not get approved by the Federal Food and Drug Administration before June 30, 2014, Amylin’s revenue sharing of 15 percent will terminate and they will only have to pay 8 percent of global net sales and products.

Upon FDA approval of a once monthly separate suspension version of BYETTA (currently in Phase II testing), Amylin will pay an additional $150 million milestone to Lilly.

It is predicted that by November 30, 2011, the transition to commercial operations by Amylin will be complete in the United States. Elsewhere in the world, commercialization and responsibility for BYETTA and BYDUREON will be transferred from Lilly to Amylin on a market basis in 2012 and 2013. Amylin will continue to develop programs and devices for BYETTA and BYDUREON.

The two companies will work together on plans for the foreign market during the transition; it is guaranteed that Lilly will not experience any loss on activities related to the drug BYETTA, up to a total cap of $60 million.

Enrique Conterno, President of Lilly Diabetes, says, “This marks an amicable end to a very productive 10-year collaboration that will continue to benefit many people worldwide. Lilly and Amylin are proud of the important accomplishments we achieved together. Lilly remains confident that the resubmission package for BYDUREON has addressed the requirements outlined by the FDA and looks forward to Amylin acheiving the alliance's long-held goal of making BYDUREON available to patients in the U.S. Looking forward, Lilly Diabetes remains committed to providing a comprehensive portfolio of diabetes treatment options for patients through our currently marketed products and robust clinical pipeline.”

"As pioneers in the GLP-1 market, we are proud of the truly innovative diabetes products that our two companies have provided patients," said Daniel M. Bradbury, President and Chief Executive Officer of Amylin Pharmaceuticals. "Amylin is excited to assume full responsibility for developing and commercializing exenatide. We anticipate working with one or more partners outside the U.S. in order to maximize the global potential of this innovative molecule and achieve greater operational flexibility and efficiency. This clarity of focus will provide us with an enhanced opportunity to increase shareholder value."