Bristol-Myers Squibb Company (BMS) and Otsuka Pharmaceutical Co. Ltd announced Otsuka has been granted exclusive rights in Japan to develop and commercialise the investigational compound saxagliptin, being studied for the treatment of type 2 diabetes.

The compound discovered by BMS, is a dipeptidyl peptidase-4 (DPP-4) inhibitor currently in phase III development in the United States and Europe.

Terms of the agreement include an upfront payment by Otsuka to BMS and it will receive milestone payments based on certain regulatory events, as well as sales-based payments following regulatory approval of saxagliptin in Japan. BMS also retains rights to co-promote saxagliptin with Otsuka in Japan. Under the licensing agreement, Otsuka will be responsible for all development costs in Japan.

"BMS is focused on the research and development of therapies for serious diseases, and this agreement is part of our ongoing effort to provide new options to diabetes patients," said Lamberto Andreotti, executive vice president and president, Worldwide Pharmaceuticals, BMS. "Our collaboration with Otsuka on the antipsychotic agent Abilify (aripiprazole) has been very successful, and we are pleased to expand our relationship to include saxagliptin."

"Otsuka has endeavoured to contribute to better health worldwide through innovative pharmaceutical products that address unmet medical needs. Our antipsychotic agent Abilify has provided us with an opportunity to work closely with BMS, and we are pleased to enhance this partnership and take on responsibility for the development and commercialisation of saxagliptin in Japan," said Tatsuo Higuchi, president and representative director, Otsuka, "I hope this compound will provide a new option to patients suffering from diabetes in Japan."

Saxagliptin is a dipeptidyl peptidase-4 (DPP-4) inhibitor, a new class of diabetes medicines that work by increasing and prolonging the action of natural hormones in the body called incretins. Incretins decrease blood sugar by increasing consumption of sugar by the body, mainly through increasing insulin production in the pancreas, and by reducing production of sugar by the liver. By enhancing the effect of active incretin hormones in the body, DPP-4 inhibitors improve timely insulin release and ultimately decrease high blood sugar levels in patients with type 2 diabetes.