Taisho Pharmaceutical Co., Ltd. and Eli Lilly and Company have terminated the license agreement for potential new drug, TS-021, an inhibitor of dipeptidyl peptidase-IV (DPP-IV) for the treatment of type 2 diabetes originated by Taisho (phase I clinical trial in Japan and USA). The decision was made by the fact that pre-clinical study results did not meet certain criteria set by Lilly.

Taisho granted Lilly exclusive rights for development and commercialization of TS-021 worldwide except for Japan and China under the license agreement executed in July 2005. Taisho will nevertheless continue development of TS-021 in Japan by itself, and Taisho's affiliate company, Taisho Pharmaceutical R&D Inc., will pursue the development outside Japan.

Taisho is the leading non-prescription pharmaceutical company in Japan and has also been strengthening its research and development efforts including development of its research infrastructure in the area of prescription drugs.