Eli Lilly and Co (INDIANAPOLIS, Indiana) and MacroGenics, Inc (ROCKVILLE, Maryland) have entered into a global strategic alliance to develop and commercialize teplizumab (MGA031 or hOKT3γ1(Ala-Ala)), a humanized, non-Fc receptor binding, anti-CD3 monoclonal antibody, as well as other potential next generation anti-CD3 molecules, for use in the treatment of multiple T–cell-mediated autoimmune diseases.

Teplizumab, a partial receptor agonist, promotes survival and expansion of regulatory T-cells (Tregs), induces regulatory cytokines and apoptosis as well as anergy of pathogenic T-cells. Production of T-cell anergy results in the preferential targeting of immunological tolerance without general immune suppression, potentially leading to short-course therapy and long-term clinical benefit.

As part of the deal, Lilly will acquire the exclusive rights to the monoclonal antibody. Teplizumab is currently being studied in the PROTÉGÉ trial, a global pivotal phase II/III clinical trial for patients with recent-onset type 1 diabetes, and has demonstrated promising phase I data in other indications including psoriatic arthritis, kidney transplantation, and pancreatic islet cell transplantation. Furthermore, there is potential interest in developing additional clinical data in other autoimmune and inflammatory indications such as psoriasis, rheumatoid arthritis, lupus, inflammatory bowel disease, and multiple sclerosis.

Under the terms of the agreement, MacroGenics will receive an initial payment of $41 million as well as $3 million in other committed funds. MacroGenics may also receive up to $200 million in potential development milestones for the type 1 diabetes indication. If teplizumab is successfully commercialized, MacroGenics may receive up to $250 million in potential sales milestones and would receive escalating royalties on sales commensurate with the stage of product development. MacroGenics would have the option to copromote teplizumab for certain indications in the US.

Lilly may make an equity investment in MacroGenics of up to $10 million in the company's next private financing round or IPO. Lilly may also decide to pursue several additional indications for teplizumab or other next generation anti-CD3 molecules developed with MacroGenics. If Lilly pursues each one of those indications, and they all ultimately gain approval, additional milestone payments to MacroGenics could exceed $600 million. Other terms of the deal were not disclosed.

Teplizumab is a humanized IgG1 monoclonal antibody that binds to an epitope of the CD3-epsilon chain expressed specifically on mature T-lymphocytes as part of the T-cell antigen receptor CD3 complex. Teplizumab is thought to inhibit unwanted effector T-cells and to enhance beneficial Treg functions, thus promoting immune tolerance rather than general immunosuppression. The monoclonal antibody is derived from OKT3 (muromonab CD3, Orthoclone®, Ortho Biotech, Inc), which was originally approved for steroid-resistant organ transplantation rejection in thousands of patients. Teplizumab contains alanine residues at positions 234/235 in the Fc region to eliminate/reduce Fc-receptor binding, reduce activation/mitogenicity, and increase patient safety. In animal models and in patients, teplizumab has been shown to induce regulatory cytokines and increase Treg populations.