Eli Lilly and Co (INDIANAPOLIS, Indiana) and TransPharma Medical Ltd (LOD, Israel), a specialty pharmaceutical company focused on the development and commercialization of drugs utilizing a proprietary active transdermal drug delivery technology, announced that the two companies have entered into a licensing and development agreement related to TransPharma's ViaDerm-hPTH (1-34) agent for the treatment of osteoporosis. Phase II clinical testing of the agent is currently underway.

Under the terms of the agreement, Lilly will obtain exclusive worldwide rights to TransPharma's agent and will also gain nonexclusive access to TransPharma's ViaDerm drug delivery system. TransPharma will receive a $35 million upfront payment and may receive development and sales milestones as well as royalties on sales if a transdermal PTH product is successfully commercialized. Both companies will fund and participate in phase II clinical development activities. Thereafter, Lilly will be responsible for further development activities and the potential commercialization of any transdermal PTH drugs.

Lilly has two key osteoporosis drugs in the market. In 2002, Lilly gained approval of Forteo^® (human PTH 1-34, teriparatide [rDNA origin] injection), a first-in-class medication that stimulates bone formation. Evista^®, the other Lilly drug, is a selective estrogen receptor modulator and acts through estrogen receptors to restore bone markers to premenopausal levels and to significantly reduce the risk of osteoporotic fractures in postmenopausal women. First-quarter 2008 sales of Forteo were $185 million, a 21% increase compared with the first quarter of 2007. US sales of Forteo increased 10%, to $118.3 million; sales outside the US grew 45%, to $66.7 million. First-quarter 2008 sales of Evista sales were $261.1 million, a 1% decrease compared with the first quarter of 2007. US sales of Evista were essentially flat at $171.3 million; sales outside the US decreased 2%, to $89.8 million.

TransPharma's ViaDerm drug delivery system incorporates a handheld electronic control unit, which creates microscopic passageways through the outer layer of the skin allowing for transdermal delivery of a wide variety of drugs from a patch. According to the company, the system provides a cost-effective, easy-to-use, self-administered solution that enables the safe, reproducible, and accurate delivery of a broad range of product candidates, including hydrophilic small molecules peptides and proteins.