Eli Lilly and Amylin Pharmaceuticals have mutually agreed to end a 10-year alliance relating to the diabetes medication exenatide.

Under the terms of the agreement, full responsibility of the global development and commercialisation of exenatide will be transferred to Amylin. Exenatide is currently marketed as Byetta, but the companies have also developed a long-acting form of the drug called Bydureon. Bydureon received approval in Europe in June 2011, but has yet to be approved by the FDA in the US after receiving a complete response letter.

Meanwhile, Eli Lilly will receive an upfront payment of $250 million and a secured note from Amylin for $1.2 billion plus accrued interest. Amylin will make future revenue sharing payments to Lilly in an amount equal to 15% of global net sales of exenatide products, which Eli Lilly will subtract from the note until the full amount has been paid.

If, however, Bydureon has not received FDA approval by June 30, 2014, Amylin’s revenue sharing obligations will terminate and the company will instead pay Eli Lilly 8% of global net sales of exenatide products. In addition, Amylin will also pay Eli Lilly a $150-million milestone contingent upon the FDA approval of a once-monthly suspension version of exenatide, which is in Phase II trials.

The transfer of commercial operations for exenatide to Amylin will be completed by November 30, 2011 in the US. In other territories, Eli Lilly will transfer responsibility and commercialisation on a market-by-market basis in 2012 and 2013.

"This marks an amicable end to a very productive 10-year collaboration that will continue to benefit many people worldwide," Enrique Conterno, president of Lilly Diabetes, said in a statement. "Lilly remains confident that the resubmission package for Bydureon has addressed the requirements outlined by the FDA and looks forward to Amylin achieving the alliance's long-held goal of making Bydureon available to patients in the US."

The agreement also resolves the outstanding litigation between the two companies. In May 2011, Amylin filed a lawsuit against Eli Lilly for anticompetitive activity after Eli Lilly embarked on a partnership with Boehringer Ingelheim to develop and commercialise a product, which Amylin believes will compete with exenatide.