Alkermes says Lilly to drop out of insulin program

BOSTON (Reuters) -- Biotechnology company Alkermes Inc (ALKS.O) said on Friday that it expects its partner Eli Lilly and Co (LLY.N) to drop out of their program to develop an inhaled insulin treatment for diabetes.

Shares of Alkermes fell as low as $11.49 following the announcement. In midmorning trade, the stock was down 3.8 percent to $11.93.

Cambridge, Massachusetts-based Alkermes, which makes the alcohol addiction drug Vivitrol, said Lilly has the right to terminate its license to AIR Insulin at its discretion and Alkermes expects Lilly to make that decision next week.

"While Lilly may elect not to commercialize AIR Insulin, Alkermes believes that the phase 3 safety and efficacy trials should be completed," Alkermes said in a statement.

(Reporting by Toni Clarke, editing by Gerald E. McCormick)