Lilly has entered into an agreement to develop Chugai’s OWL833, a oral non-peptidic GLP-1 receptor agonist currently in Phase I for type II diabetes.

Under the terms of the deal, Lilly will receive worldwide development and commercialisation rights to the drug.

In return, Chugai will receive an upfront payment of $50 million and is eligible for milestone payments based on achievement of certain predetermined milestones, as well as royalty payments if the drug makes it to market.

“This exciting new opportunity from Chugai could represent a significant step forward for improving outcomes for people with diabetes,” said Daniel Skovronsky, Lilly’s chief scientific officer and President of Lilly Research Laboratories, commenting on the deal.

“We believe OWL833 can be a best-in-class oral non-peptide GLP-1 receptor agonist and that its value will be further enhanced through Lilly’s clinical development to contribute to people around the world who live with diabetes,” added Chugai’s executive vice president, co-head of Project & Lifecycle Management Unit.