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By Michael Fitzhugh

Eli Lilly (NYSE:LLY) is opening a new basic research center in China where it hopes to discover new drugs to battle a ballooning diabetes epidemic there.

The company suffered a key setback in October when the U.S. Food and Drug Administration refused to approve Bydureon, Lilly’s weekly-dosed version of its blockbuster diabetes treatment Byetta. But with the need for innovative treatments for the disease greater than ever, Lilly CEO John Lechleiter says the company is still committed to increasing collaboration and breaking through the barriers that have hampered progress against the disease.

“For all our progress in treating diabetes, our ultimate goal seems as far away as ever,” Lechleiter said at a recent Cleveland Clinic Medical Innovation Summit.

Nearly 10 percent of people over age 20 in China cope with diabetes, according to a recent survey of the disease published in the New England Journal of Medicine. Diabetes is a major risk factor for China’s leading cause of death, cardiovascular disease.

“By establishing a diabetes research center in China, Lilly will be better able to discover medicines that are well suited to the particular needs of patients with diabetes in China,” says Jacques Tapiero, senior vice president and president of Lilly's emerging markets business.

The Shanghai-based center will also help Lilly focus on key differences in the molecular basis of diabetes in Chinese and other Asian populations, says David Moller, vice president of endocrine and cardiovascular research at Lilly.

The center will open in the second half of 2011 and is expected to employ 100 scientists and support staff, the Indianapolis-based company said.

The center could also give Lilly new access to talented scientists, says Jan Lundberg, president of Lilly Research Laboratories and the company’s EVP of science and technology. Outside R&D talent has become ever-more important to Lilly, which has generally emphasized cost-cutting in recent months as it works to achieve $1 billion in savings to counter pending revenue losses tied to patent expirations.

Source: Lilly Opens New Diabetes Research Center With Focus on China