Johnson & Johnson subsidiary Ortho-McNeil-Janssen has tied up new diabetes drug development deals with Diamyd and Metabolex worth a potential $1 billion combined, adding therapies for both Type 1 and Type 2 diabetes to its pipeline.

Ortho will pay Diamyd Medical $45 million plus partial research expenses as part of a new development pact giving Ortho exclusive rights to a late-stage therapy for the prevention and treatment of Type 1 diabetes. Additional sales and milestone payments could add up to $580 million more to Diamyd's payday.

Diamyd is evaluating the drug in newly diagnosed Type 1 diabetes patients for its ability to delay or prevent progression of the disease and its associated complications by delaying or preventing further destruction of pancreatic islet beta cells.

The agreement will strengthen Ortho's development pipeline and reflects the company's commitment to building a first-rate portfolio of pharmaceutical treatments for diabetes says Martin Fitchet, an executive at Johnson & Johnson Pharmaceutical Research & Development, a subsidiary of J&J.

Diamyd retained the right to commercialize the product in Denmark, Finland, Iceland, Norway, and its native Sweden.

The Diamyd deal is expected to close in the third quarter of 2010, pending clearance under the Hart-Scott-Rodino Act.

Hayward, California-based Metabolex will receive up to $330 million in milestone payments to develop and discover compounds for the treatment of Type 2 diabetes and other disorders. The agreement gives Ortho exclusive global rights to develop, manufacture, and commercialize several of its preclinical programs, but Metabolex is still eligible for royalties on worldwide sales.

Metabolex followed the announcement of the Ortho-McNeil agreement with news of a global licensing agreement with Sanofi-Aventis worth up to $375 million in upfront and milestone payments centered on small molecules that modulate the G-protein coupled receptor 119, a receptor in the gut and pancreas that interacts with bioactive lipids to stimulate glucose-dependent incretin and insulin secretion. Agonists of GPR119 represent a first-in-class oral treatment for type 2 diabetes that function through a unique dual mechanism of action.

The agreement with Sanofi includes MBX-2982, a potent selective orally active GPR119 agonist discovered by Metabolex. MBX-2982 has completed three early-stage clinical studies and has demonstrated clinically meaningful glucose reductions in healthy volunteers and subjects with impaired glucose tolerance. In all of these studies, MBX-2982 was found to be safe and well tolerated. MBX-2982 is currently in a multi-national mid-stage clinical study in patients with type 2 diabetes.

It has been a busy year so far, so far as diabetes treatments go. Novo nailed an FDA approval for Victoza, a Type 2 diabetes treatment for adults. Forest Laboratories put $50 million into a deal for a group of glucose-lowering agents developed by TransTech in early June. Astellas decided to shell out $4 billion to acquire OSI, bringing one of its two mid-stage diabetes drugs into the fold—the other belonged to Lilly before the acquisition. Merck has said one of its five anticipated FDA filings this year will cover diabetes. And Sanofi decided to license an early-stage diabetes drug from CureDM.