An emergency diabetes treatment that became a modest seller under Eli Lilly is heading to a new home as the pharmaceutical giant hones its focus on its pipeline of next-generation treatments for the metabolic disorder.
Lilly announced Monay that it is selling its drug, Baqsimito Amphastar Pharmaceuticals for $500 million up front. The deal spans global rights to the intransasal medication.
Baqsimi is an emergency treatment for severe hypoglycemia, or low blood sugar. The drug is a powder formulation of glucagon, a hormone that gets the liver to release more glucose into the blood. Glucagon emergency kits are available with injectable versions of the hormone. FDA approval of Baqsimi in 2019 made the drug the first intranasal treatment for severe hypoglycemia.
Lilly acquired Baqsimi from Locemia Solutions in 2015, when the drug was still in late-stage clinical development. Financial terms of that deal were not disclosed. Lilly launched Baqsimi shortly after its 2019 FDA nod. The company says the medication is currently available in 27 markets, racking up $139.3 million in global sales last year.
Amphastar specializes in selling generic and proprietary injectable, inhalation, and intranasal medications. The Rancho Cucamonga, California-based company’s top-selling product is the asthma treatment Primatene Mist, which accounted for $84.3 million in 2022 sales, a 15% increase over sales in the prior year. The company also sells epinephrine for the emergency treatment of allergic reactions. Baqsimi will give Amphastar a second emergency product for severe hypoglycemia. The company already markets a generic version of injectable glucagon for emergency kits.
“The acquisition of Baqsimi will integrate our core strategic vision of strengthening our proprietary products profile in addition to enhancing our diabetes portfolio offering,” Amphastar President and CEO Jack Zhang said in a prepared statement, “We are optimistic about Baqsimi’s growth potential as it is the first and only commercial intranasal glucagon demonstrated to treat low blood sugar emergencies.”
In addition to the upfront payment, the agreement calls for Amphastar to pay Lilly an additional $125 million cash at the one-year anniversary of the deal’s closing. Lilly is also in line to receive sales-based milestone payments that could reach up to $450 million. The boards of directors of both companies have approved the transaction, which is expected to close in the second or third quarter of this year.
Diabetes continues to be Lilly’s biggest therapeutic area, led by Trulicity, which accounted for $3.8 billion in 2022 revenue. Blockbuster insulin products are also part of the Lilly diabetes portfolio, but the company will rely on them less to drive revenue growth. Last month, Lilly said it would cap monthly out-of-pocket costs for patients on insulin and slash prices on its insulin products.
The changes come as new diabetes medicines build up the pharma giant’s portfolio. Lilly has been focused on tirzepatide, brand name Mounjaro, a peptide drug that offers a dual mechanism for controlling blood sugar. Approved nearly a year ago for treating type 2 diabetes, Lilly is also seeking to expand tirzepatide’s use to include obesity. Each indication represents a blockbuster opportunity for Lilly.