by CHEN Yang

Innovent Biologics has reached its seventh partnership with Eli Lilly to jointly advance innovative therapies in oncology and immunology for global development, extending a long-running alliance that has shaped the Chinese biotech's rise.

Under the agreement, Innovent will lead work from drug discovery through proof of concept in China, defined as the completion of Phase II clinical trials, and retain all rights in Greater China. Lilly will obtain exclusive development and commercialization rights outside Greater China. Innovent will receive an upfront payment of US$350 million and could earn up to US$8.5 billion in milestone payments.

Shares rose 7.42% to HK$85.4 after the announcement, giving the company a market capitalization of about HK$148.2 billion.

At a business update meeting on February 9, management told Jiemian News that the deal was struck before any specific molecule had been identified and is structured as a licensing transaction. The collaboration involves entirely new targets and molecules outside Innovent's existing clinical pipeline, and is therefore "purely incremental" to the company.

Executives added that the number of molecules involved is smaller than in recent platform-style licensing deals by domestic peers, including a transaction between Jiangsu Hengrui Pharmaceuticals and GSK. While details were not disclosed, the overall financial terms were described as "very good".

Lilly has played a significant role in Innovent's development. In 2015, the two companies agreed to co-develop the PD-1 inhibitor sintilimab in China. The drug was approved in 2018 and became the only PD-1 therapy included in China's national reimbursement list in 2019, cementing its position as a cornerstone product in Innovent's oncology portfolio.

In 2019, Innovent licensed China rights from Lilly to the GCG/GLP-1 dual receptor agonist mazdutide. The drug was launched in 2025 and became the first domestically developed dual-target weight-loss therapy on the Chinese market.

Lilly has also granted Innovent commercialization rights in China for several of its medicines, including ramucirumab, selpercatinib and pirtobrutinib, providing additional revenue streams and broadening its product mix.

As Innovent's capabilities have strengthened, the latest deal has drawn mixed reactions within the industry.

On one hand, without an identified molecule, the company is effectively monetizing its research and clinical execution capabilities, securing a sizeable upfront payment. On the other, some observers argue that Innovent continues to act primarily as a development partner for multinational pharmaceutical groups. Even if the projects eventually succeed, Innovent will retain rights only in Greater China, potentially foregoing larger returns overseas.

Given that Innovent is widely regarded as one of China's leading innovative drugmakers, second only to BeOne Medicines, and now has substantial cash reserves and R&D capacity, the decision to out-license global rights at an early stage has been seen by some as limiting the upside for domestic biotech.

A veteran investor in the innovative drug sector told Jiemian News that early-stage licensing is common among Chinese biopharmaceutical companies because "foreign companies are willing to pay high premiums — and if the price is right, companies will take it."

Still, Innovent has been experimenting with different models of international expansion. In 2025, it said it was entering a new phase driven by two engines — oncology and chronic disease — alongside globalization. Beyond Lilly, it has partnered with Roche, Takeda and Ollin.

Some agreements follow a traditional licensing model, while others adopt co-development or NewCo structures. Its collaboration with Takeda on IBI363, for example, uses a co-development approach aimed at gradually building research and commercialization capabilities in core overseas markets.

By 2030, Innovent aims to advance five pipelines into global multi-regional Phase III trials and develop end-to-end capabilities spanning research, regulatory approval and sales. The company has also set a target of reaching 20 billion yuan in annual product revenue by 2027. It recently forecast that total product revenue for 2025 would reach about 11.9 billion yuan, up roughly 45% year on year and surpassing the 10 billion yuan mark for the first time.