US-based biopharmaceutical company Eli Lilly and Company (Lilly) has entered into a drug discovery collaboration with Japanese pharmaceutical company Sosei Heptares.

Under the collaboration, the two companies will discover, develop, and commercialise small molecules that modulate novel G protein-coupled receptor (GPCR) targets related to diabetes and metabolic diseases.

Sosei Heptares will receive an upfront payment of $37m and is also eligible to receive up to $694m in development and commercial milestone payments.

In addition, the company will receive tiered royalties on the worldwide sale of the products emerging from the collaboration.

Sosei Heptares UK research and development head Matt Barnes said: “This new agreement with Lilly further reinforces our position as a global partner of choice for GPCR-focused drug discovery targeting major diseases where patients remain in need of new and effective therapies.

“We provide a highly attractive approach that is recognized by many of the world’s leading biopharmaceutical companies and are delighted to add Lilly to that list.

“Lilly is a recognised world leader in diabetes and metabolic diseases, and we look forward to a collaboration that brings together our respective and complementary expertise with the goal of identifying and developing novel candidates to advance in these important areas of unmet need.”

The Japanese drugmaker will focus on multiple GPCR targets selected by Lilly to create novel small molecule candidates for further development and commercialisation.

The collaboration will leverage Sosei Heptares’ structure-based drug design (SBDD) platform and its StaR (stabilised receptor) technology for drug discovery.

StaR technology will help stabilise a GPCR by engineering a small number of single-point mutations to retain their organised structure after being removed from the cell membrane

In addition, the technology will enable the production of stabilised proteins that can be used for biologics discovery, through in-vitro phage screening, or for in-vivo immunisation.

The collaboration will also use Lilly’s expertise in drug development and commercialisation, along with its therapeutic area expertise in diabetes and metabolic diseases.

Lilly group diabetes and metabolic research vice president Ruth Gimeno said: “Continued innovation across Diabetes and Metabolic Diseases has been a key priority for Lilly for many years. This requires us to access cutting-edge expertise and technologies to successfully advance our mission in this area.

“We look forward to combining forces with Sosei Heptares and are confident that this new partnership will enable us to unlock new targets and generate novel treatments for these diseases and bring new treatments to patients.”