Glenmark Pharma & Lilly announce license agreement

Eli Lilly and Company (NYSE:LLY) today announced that it has entered into an agreement with Glenmark Pharmaceuticals S.A. (GPSA) a wholly owned subsidiary of Glenmark Pharmaceuticals Limited India (GPL). Under the terms of the agreement, Lilly will acquire the rights to a portfolio of transient receptor potential vanilloid sub-family 1 (TRPV1) antagonist molecules, including a clinical compound, GRC 6211. GRC 6211 is currently in early clinical Phase II development as a potential next-generation treatment for various pain conditions, including osteoarthritic pain.

Under the terms of the agreement, Glenmark will receive an upfront fee of $45 million and could receive up to an additional $215 million in potential development and sales milestones for the initial indication, as well as royalties on sales if GRC 6211 is successfully commercialized. If other indications are successfully developed, Glenmark would be entitled to additional milestones up to $90 million. Lilly will have marketing rights for North America, Europe and Japan, while Glenmark will retain the marketing rights in all other countries. Further Glenmark will have the right to co-promote GRC 6211 in the United States. Other terms of the deal were not disclosed.

"This agreement is further evidence of Lilly's commitment to seek out novel treatments for important medical conditions, such as osteoarthritic pain," commented William Chin, M.D., Lilly vice president, discovery research and clinical investigation. "We believe that TRPV1 represents a promising pathway for pain research. GRC 6211 has shown good potential in early-phase development and will be a strong addition to our own internal pipeline of potential pain molecules."

According to Glenn Saldanha, Managing Director and CEO of GPL, "This agreement further validates that Indian companies have the ability to do world class innovative R&D and Glenmark's leadership in the Indian drug discovery arena. We have made excellent progress in our TRPV1 program at Glenmark and are very excited to be partnering with Lilly, a worldclass research-driven global pharmaceutical company."

The agreement became effective in the fourth quarter of 2007. At closing, Lilly would expect a charge to earnings for acquired in-process research and development. The amount of the charge has not yet been determined, but is estimated to be $0.02 per share. Lilly's fourthquarter and full-year pro forma adjusted earnings per share guidance remain unchanged at $0.86 to $0.91 and $3.50 to $3.55, respectively. On a reported basis, including the charge for this transaction with Glenmark, as well as the other charges in the tables below, Lilly now expects its fourth-quarter earnings per share to be in the range of $0.81 to $0.86 and its full-year earnings per share to be in the range of $2.74 to $2.79.