Eli Lilly (LLY) Stock Strikes $8.5 Billion Deal With Chinese Biotech Partner

TLDR Eli Lilly (LLY) expanded its partnership with Innovent Biologics in a seventh collaboration deal announced Sunday The agreement grants Lilly exclusive worldwide development rights outside Greater China for new cancer and immunology drugs Innovent receives $350 million upfront with potential milestone payments reaching $8.5 billion total Partnership shifts from licensing existing drugs to joint development from conception through Phase 2 trials Deal reflects growing collaboration between Western drugmakers and China’s cost-efficient biotech sector Eli Lilly announced an expanded partnership with Chinese drugmaker Innovent Biologics on Sunday. The collaboration focuses on jointly developing new cancer and immune system treatments. Eli Lilly and Company, LLY This marks the seventh deal between the two companies. The partnership structure differs from previous agreements by involving joint drug development rather than licensing. Lilly will pay Innovent $350 million upfront. The Chinese partner can earn up to $8.5 billion in additional milestone payments based on development progress. Innovent shares jumped 7% in Hong Kong Monday following the announcement. The stock initially surged 8.6% before settling at a 7% gain. Division of Development Responsibilities Under the agreement terms, Innovent leads early-stage research and clinical development in China. The company will advance selected programs through proof-of-concept studies and Phase 2 trials. Lilly secured exclusive rights to develop and commercialize resulting medicines outside Greater China. Innovent retains commercialization rights in its home region. The financial structure includes tiered royalties on sales of products Lilly markets globally. Total compensation depends on clinical success and regulatory approvals. “The deal is a positive surprise to the market,” said Cui Cui, Jefferies’ head of Asia healthcare research. She noted the framework demonstrates long-term partnership commitment. The companie...