Chi-Med amends License & Collaboration Agreement with Eli Lilly

Hutchison China MediTech (HCM) announces certain amendments to the 2013 License and Collaboration Agreement on fruquintinib with Lilly Shanghai an affiliate of Eli Lilly (LLY). The 2018 Amendment covers adjustments in the respective roles and responsibilities of Chi-Med and Lilly, in China, for the development and commercialization of fruquintinib in the areas of future life cycle planning and development, collaborations for co-development of fruquintinib with other third-party anti-cancer agents as well as promotion and distribution rights of fruquintinib. Under the terms of the 2013 Agreement, decision making on LCI development beyond the initial indications of third-line colorectal cancer, or CRC, third-line non-small cell lung cancer, or NSCLC, and second-line gastric cancer was controlled by Lilly. The majority of development costs for LCIs were to be paid by Lilly, with the minority by Chi-Med. The 2018 Amendment now gives Chi-Med all planning, execution and decision making responsibilities for LCI development on fruquintinib in China. Chi-Med will pay all of the costs associated with fruquintinib LCI development in China. In return for this investment of capital and resources, Lilly will pay Chi-Med a $20 million milestone upon approval of each fruquintinib LCI in China, for up to three LCIs, totaling up to $60 million in LCI approval milestone payments. Furthermore, upon the launch of the first LCI, the tiered royalty structure, payable by Lilly to Chi-Med on total molecule sales in China, has been raised from the range of 15-20% in the 2013 Agreement to a new level of 15-29% under the 2018 Amendment. Under the terms of the 2013 Agreement, Lilly held full commercialization rights to fruquintinib in China. The 2018 Amendment provides Chi-Med the right to promote fruquintinib in provinces that represent 30% of the sales of fruquintinib in China upon the occurrence of certain commercial milestones. The Chi-Med Territory will expand to provinces that represent 40% of the sales of fruquintinib in China subject to additional criteria being met. Lilly will pay Chi-Med a fee for service to conduct all promotional activities in the Chi-Med Territory. Lilly has provided consent, and freedom to operate, for Chi-Med to enter into joint development collaborations with certain third-party pharmaceutical companies to explore combination treatments of fruquintinib and various immunotherapy agents. The first such collaborations with Innovent Biologics and Genor Biopharma will explore the combination of fruquintinib and their respective programmed cell death protein-1 antibodies, sintilimab and genolimzumab, in several solid tumor settings.
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