AstraZeneca and Eli Lilly have inked an agreement to jointly develop and commercialize AZD3293, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in development as a potential treatment for Alzheimer’s disease.

The progression of Alzheimer’s disease is characterized by the accumulation of amyloid plaque in the brain, which is comprised of peptides called amyloid beta. BACE is an enzyme associated with the development of amyloid beta. Inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease. AZD3293 is an oral, potent and selective small molecule inhibitor of BACE that has been shown in phase I studies to significantly and dose-dependently reduce levels of amyloid beta in the cerebro-spinal fluid of Alzheimer’s patients and healthy volunteers. AZ plans to move AZD3293 into registration trials.

Lilly will pay AZ up to $500 million in development and regulatory milestone payments. AZ expects to receive the first milestone payment of $50 million in the first half of 2015. The companies will share all future costs equally for the development and commercialization of AZD3293, as well as net global revenues post-launch.

AZ and Lilly aim to progress AZD3293 rapidly into a phase II/III clinical trial in patients with early Alzheimer’s. Lilly will lead clinical development, working with researchers from AZ’s innovative medicines unit for neuroscience, while AZ will be responsible for manufacturing. The companies will take joint responsibility for commercialization of AZD3293.

Mene Pangalos, executive vice president, innovative medicines and early development at AZ, said, “Alzheimer’s disease is one of the biggest challenges facing medical science today and BACE inhibitors have the potential to target one of the key drivers of disease progression. We are looking forward to working with Lilly, an organization with a long term commitment to and expertise in treating Alzheimer’s disease. We believe that, by combining the scientific expertise from our two organizations and by sharing the risks and cost of late stage development, we will be able to accelerate the advancement of AZD3293 and progress a promising new approach to support the treatment of Alzheimer’s patients around the world.