Rigel Pharmaceuticals Enters into License and Collaboration Agreement with Eli Lilly

Strategic Insights -

Rigel Pharmaceuticals, Inc. and Eli Lilly and Company have announced a strategic partnership to co-develop and commercialize Rigel's R552, a RIPK1 inhibitor, for the treatment of non-central nervous system (non-CNS) diseases. The license and collaboration agreement also aims to develop additional RIPK1 inhibitors for CNS diseases. Under the terms of the agreement, Rigel will receive an upfront payment of $125 million, with potential milestone payments of up to $330 million for non-CNS disease products and $255 million for CNS disease products.

Key Takeaways:

  • Rigel Pharmaceuticals, Inc. has entered into a license and collaboration agreement with Eli Lilly and Company to co-develop and commercialize R552, a RIPK1 inhibitor, for non-CNS diseases.
  • The agreement also aims to develop additional RIPK1 inhibitors for CNS diseases.
  • Rigel will receive an upfront payment of $125 million, with potential milestone payments of up to $330 million for non-CNS disease products and $255 million for CNS disease products.
  • Rigel has the right to opt-out of co-funding R552 development activities in the U.S., Europe, and Japan at two specified times, without triggering significant changes to the partnership.
  • The partnership will be governed through a joint governance committee and appropriate subcommittees, with Rigel and Lilly jointly responsible for performing development activities for R552.
  • Lilly is responsible for funding the remainder of all development activities for R552 and other non-CNS disease development candidates.
  • Rigel will receive tiered royalty payments on net sales of non-CNS disease products at percentages ranging from mid-single digits to high-teens, subject to standard reductions and offsets.
  • The License Agreement has a term that continues on a product-by-product and country-by-country basis until the latest to occur of specified licensed patents expiring, loss of market exclusivity, and 12 years after first commercial sale of such product in such country.
  • The partnership may be terminated for cause, bankruptcy, or challenges to any patent owned by the other party.
  • Lilly may terminate the License Agreement without cause on specified notice periods, either in its entirety or with respect to the non-CNS disease product program or the CNS disease product program.

Statistics:

  • $125 million upfront payment to Rigel Pharmaceuticals, Inc.
  • Potential milestone payments of up to $330 million for non-CNS disease products.
  • Potential milestone payments of up to $255 million for CNS disease products.
  • Up to $100 million in sales milestone payments for non-CNS disease products.
  • Up to $150 million in sales milestone payments for CNS disease products.
  • Tiered royalty payments on net sales of non-CNS disease products at percentages ranging from mid-single digits to high-teens.
  • Tiered royalty payments on net sales of CNS disease products at percentages up to low-double digits.

Sources:

  • Rigel Pharmaceuticals, Inc. (Form 8-K, filed on February 18, 2021)
  • Comtex SmarTrend Alert (February 14, 2021)