Lilly has signed a deal, potentially worth $500m, with a Chinese biotech firm to develop new cancer therapies.
Lilly will pay $56m upfront to Shanghai start-up Innovent Biologics, with an extra $400m on offer should the biotech hit its sales milestones.
Michael Yu, co-founder, president and CEO of Innovent, said: “This ground-breaking collaboration establishes Innovent as the very first company in China to form such a broad alliance with a global pharmaceutical company, and we are honoured to collaborate with a company as esteemed as Lilly.”
The agreement will see the companies co-develop at least three experimental cancer drugs, including one from Lilly’s research labs and two from Innovent.
This will help expand Lilly’s efforts in cancer immunotherapies and biosimilars, both of which are major growth drivers for the industry.
The companies will jointly market the drugs in China, if they win regulatory approval, while Lilly will be responsible for marketing them in the rest of the world.
Alfonso Zulueta, senior vice president, and president, Lilly Emerging Markets, said: “We are pleased to collaborate with Innovent to develop potential therapies for those fighting cancer in China and around the world.
“This alliance marks an important milestone in our longstanding commitment to China, and further reinforces our focus to develop collaborative networks to advance research and clinical development in emerging markets.
Lilly will use the deal to also make deeper inroads into the Chinese market, currently the second largest pharma market in the world.
It is ripe for growth for the industry, but the country’s tight grip on the medicines budget, and the recent legal wrangles experienced by GlaxoSmithKline, has meant that pharma will need to tread carefully.
Innovent’s Yu explained how his firm would be able to help Lilly: “Given our experience, significant insights into the China market and international compliance standards, we strongly believe Innovent is ideally suited to serve as Lilly’s Chinese collaborator of choice.”
This is the second research-led deal to be announced Lilly, which has also in the past week signed a $690m deal with the South Korean company Hanmi for its autoimmune drug HM71224.