18 June 2013 - Biopharmaceutical company Transition Therapeutics Inc (NASDAQ:TTHI) (TSX:TTH) stated on Monday that Eli Lilly and Company has exercised its option to assume all development and commercialisation rights to TT-401.

Eli Lilly and Company will pay a USD7m milestone payment to Transition for the exercise of the rights to TT-401, a dual agonist of the GLP-1 (Glucagon-Like Peptide-1) and glucagon receptors that is being developed to treat type 2 diabetes and accompanying obesity.

As part of an amended agreement, Lilly will assume all costs and perform all future development and commercialisation activities of TT-401. Transition will contribute payment of USD14 million to Lilly in three separate installments during the Phase 2 clinical study.

Upon successful commercialisation of TT-401, Transition will be eligible to receive approximately USD240m in additional milestone payments as well as be eligible to receive a double-digit royalty on sales of TT-401 products and a low single digit royalty on related compounds.