Amylin Pharmaceuticals Inc. (AMLN) filed a lawsuit against Eli Lilly & Co. (LLY), alleging Lilly's recent diabetes-drug partnership with Boehringer Ingelheim breaches the terms of Lilly's older partnership with Amylin to market other drugs for the disease.

Lilly and Amylin have an alliance dating to 2002 to develop and commercialize the type 2 diabetes drug exenatide, which is now sold as a twice-daily injection under the brand Byetta. They also have co-developed a once-weekly injection formulation of exenatide--to be sold under the brand Bydureon--but have hit a regulatory delay in bringing that drug to the U.S. market.

In January, Lilly signed an agreement with Boehringer Ingelheim to jointly develop and commercialize several diabetes drugs, including one approved earlier this month by the Food and Drug Administration, Tradjenta.

Amylin said in a press release Monday that Tradjenta "will compete directly" with exenatide. Amylin's lawsuit seeks to prevent Lilly from using the same sales force to sell both Tradjenta and exenatide products.

"Lilly is engaging in improper, unlawful and anticompetitive behavior in the manner in which it plans to implement its recently announced global alliance agreement with Boehringer Ingelheim," Amylin said in a press release.

Amylin spokeswoman Anne Erickson said the lawsuit was filed under seal in U.S. District Court for the Southern District of California. She declined to comment beyond the company's statement.

Lilly said in a statement the lawsuit is without merit and it will defend its position. "Lilly has been and remains fully committed to fulfilling its obligations under its exenatide collaboration agreement with Amylin as well as to complying with all laws and regulations," Enrique Conterno, president of Lilly's diabetes unit, said in the statement. "We look forward to building on the alliance's success achieved to date."

Analysts have predicted Bydureon could generate sales of $1 billion to $3 billion annually. An advisory body to European drug regulators has recommended Bydureon be approved for sale in the European Union.

Alkermes Inc. (ALKS) developed the dose-delivery technology for Bydureon.

Amylin shares fell 1% to $13.50 in recent trading; Lilly shares rose 14 cents to $39.09.

   -Peter Loftus, Dow Jones Newswires; +1-215-982-5581; 
   peter.loftus@dowjones.com
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