Eli Lilly has signed a licence and collaboration agreement with Swiss biotech AC Immune for the research and development of tau aggregation inhibitor small molecules to treat neurodegenerative disorders, including Alzheimer’s disease.

The partnership will leverage AC Immune’s Morphomer platform technology along with Lilly’s expertise in clinical development and commercial capabilities in central nervous system conditions area.

Lilly and AC Immune will focus on the development of ACI-3024, which is included under the latter’s Morphomer Tau programme. Preclinical findings showed the candidate caused the inhibition of tau aggregation.

AC Immune will be responsible for the Phase I development of the Morphomer tau aggregation inhibitors, while Lilly will fund and carry out further clinical development.

Eli Lilly neurodegeneration and pain research vice-president Mark Mintun said: “This agreement with AC Immune represents another opportunity to hopefully make progress against this devastating disease, and we look forward to together bringing tau aggregation inhibitors into clinical development.”

As part of the agreement, Lilly will pay CHF80m ($80.54m) and $50m in exchange for a note convertible to equity at a premium.

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“Lilly’s substantial experience in neurology, and particularly in Alzheimer’s disease, is a major validation of our small molecule platform for CNS therapeutics.”

The Swiss biotech is also eligible for CHF60m in near-term development milestones, and up to CHF1.7bn worth of potential development, regulatory and commercial milestone payments.

Lilly will receive worldwide commercialisation rights for the tau aggregation inhibitors in Alzheimer’s.

AC Immune has retained select development rights in orphan indications and co-development and co-promotion options in certain other indications.

AC Immune CEO Andrea Pfeifer said: “Lilly’s substantial experience in neurology, and particularly in Alzheimer’s disease, is a major validation of our small molecule platform for CNS therapeutics. It also demonstrates the potential of our pre-clinical assets and adds substantial value to our pipeline.”

The agreement is subject to the Hart-Scott-Rodino Antitrust Improvements Act clearance and other customary closing conditions.

According to Alzheimer’s Association, Alzheimer’s disease is the sixth leading cause of death in the US. Every 65 seconds, the progressive neurodegenerative condition is developed by an individual in the country.

Currently, 5.7 million Americans are living with the disease and the number is expected to reach 14 million by 2050, costing $1.1tn.