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Lilly seeks a new Prozac
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December 7, 1998: 9:02 a.m. ET
Drug maker licenses modified key ingredient from Sepracor
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NEW YORK (CNNfn) - Eli Lilly and Co. has agreed with Sepracor Inc. to license a modified form of an ingredient found in the widely prescribed antidepressant Prozac, the companies said Monday.
The agreement covers R-fluoxetine, which is currently in Phase I clinical development in the United States. Indianapolis-based Lilly (LLY) said the ingredient has shown greater flexibility in treating depression than other currently marketed antidepressants.
Prozac is one of the most important pharmaceuticals produced by Lilly. The company said it was prescribed for more than 35 million people in over 100 countries, and accounted for sales of $2.6 billion in 1997.
However, the company has been looking for something to succeed the drug, whose patents will expire within the next six years, according to the Wall Street Journal. Once the patents expire, generic drug makers will have the opportunity to make their own version of the antidepressant, threatening Lilly's dominance in the field.
Lilly said the patent for R-fluoxetine, for which it would obtain the rights from Sepracor, expires in 2015.
Under terms of the agreement, Lilly will pay Sepracor (SEPR) $20 million up front, part of which is a licensing fee. The Marlboro, Mass.-based biotech company also will receive $70 million in additional milestone payments as R-fluoxetine is developed, and will receive royalty payments on worldwide sales beginning at product launch.
"Despite recent advances in diagnosing and treating clinical depression, this illness remains a vastly underdiagnosed and therefore undertreated disease affecting more than 18 million adults alone," said Sidney Taurel, Lilly president and chief executive officer.
"This licensing agreement with Sepracor, coupled with our internal progress in developing new antidepressants, will enable Lilly to introduce new and advanced treatments for this debilitating illness," Taurel added.
Lilly will get all worldwide rights to R-fluoxetine and will be responsible for all subsequent development work and regulatory submissions. The company said it expects to complete the clinical studies needed to evaluate the ingredient by 2001, when the regulatory process would be expected to begin. 
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Eli Lilly
Sepracor
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