Eli Lilly Agrees With Nektar To Co-Develop NKTR - 358

(RTTNews) - Eli Lilly and Co. (LLY) and Nektar Therapeutics (NKTR) Monday announced a strategic collaboration to co-develop NKTR-358, an immunological therapy discovered by Nektar. The compound is intended to reat a number of autoimmune and other chronic inflammatory conditions.

Under the terms of the agreement, Nektar will receive an initial payment of $150 million and is eligible for up to $250 million in additional development and regulatory milestones.

Nektar will be responsible for completing Phase 1 clinical development. In the Phase 2 development, Lilly will bear 75 percent costs and Nektar the rest 25 percent.

As per the agreement, Nektar will have the option to participate in Phase 3 development on an indication-by-indication basis and with an opportunity for double-digit royalties. Lilly will bear all the costs of global commercialization while Nektar will take care of co-promotion in the U.S.

This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Upon closing Lilly expects a charge to earnings in 2017 of approximately $0.09 per share, reducing its reported earnings per share guidance in 2017. There will be no change to the company's adjusted earnings per share guidance.