KeyBioscience AG, a subsidiary of Danish biotech company Nordic Bioscience, announced on Thursday that it has extended its collaboration with US pharmaceutical company Eli Lilly and Company (NYSE:LLY) for the development of Dual Amylin Calcitonin Receptor Agonists (DACRA), a new class of potential treatments for obesity and related disorders.

The partnership extends Lilly's rights to KeyBioscience's DACRA platform, including a new molecule that is expected to enter a Phase 2 study in subjects with obesity and osteoarthritis (OA) later this year. KeyBioscience will conduct and complete this study which is planning to enrol 600 people, with dual primary endpoints on body weight and alleviation of OA pain.

According to the terms of the extended agreement, Lilly will receive global rights to develop and commercialise DACRA molecules. In exchange for these rights, KeyBioscience will receive an initial payment; downstream consideration worth up to USD1.4bn, subject to the achievement of certain development, regulatory and commercialisation milestones; and tiered mid-single digits to low double-digits royalties on net sales.

Morten Karsdal, Nordic Bioscience CEO, said: "DACRAs have been shown to be potent weight loss agents with potential for additional insulin sensitisation. We are extremely excited to move forward with the clinical programme, as this class in other Phase 2 trials has shown significant weight loss in people with obesity and clinically meaningful improvement of glycaemic control. We believe this is a very competitive molecule with very high potency and low immunogenicity risk and look forward to collaborating further with Lilly to advance this important work."