AZN AstraZeneca PLC

By Tapan Panchal

LONDON--U.K.-based pharmaceutical company AstraZeneca PLC (AZN.LN) said Tuesday that it signed an agreement with U.S.-based Eli Lilly and Co. (LLY) to develop and commercialize AZD3293, an oral beta secretase cleaving enzyme for the treatment of Alzheimer's disease.

Alzheimer's is an illness that causes progressive memory decline.

Under the agreement, Lilly will pay AstraZeneca up to $500 million in development and regulatory milestone payments. AstraZeneca expects to receive the first milestone payment of $50 million in the first half of 2015. The companies will share all future costs and revenue equally from the development of AZD3293. AstraZeneca will be responsible for manufacturing AZD3293, while Lilly will lead the clinical development.

AstraZeneca said the agreement will have no impact on its 2014 core earnings per share.

Write to Tapan Panchal at tapan.panchal@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires