Lilly inks a $456M oncology deal with China's Innovent

In a second major bet on Asian R&D, Eli Lilly ($LLY) has signed a $456 million partnership with China's Innovent Biologics to collaborate in oncology, mixing and matching assets with hopes of finding success in each company's home country.

Under the deal, Lilly is handing over $56 million up front to launch a give-and-take relationship that covers at least three new cancer medicines and promises Innovent up to $400 million more tied to milestones. Lilly gets the ex-China rights to an Innovent antibody targeting the cancer antigen CD20, a preclinical immunotherapy and up to three bispecific antibodies now in preclinical testing. For its part, Innovent gets the Chinese rights to Lilly's c-Met antibody program for lung cancer, the two companies plan to co-market each therapy in China.

For Innovent, the deal follows a head-turning $100 million financing round closed earlier this year, part of the company's long-held plans to become China's go-to maker of biologics. The Shanghai-headquartered drugmaker is moving forward with a pipeline of 10 monoclonal antibodies--6 proprietary and four biosimilar--with two candidates slated to enter the clinic this year. Now, pairing up with Lilly, Innovent is raising its profile among Western drugmakers, a key aspect of its growth strategy, CEO Michael Yu said.

"This groundbreaking collaboration establishes Innovent as the very first company in China to form such a broad alliance with a global pharmaceutical company, and we are honored to collaborate with a company as esteemed as Lilly," Yu said in a statement. "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."

As for Lilly, the Innovent collaboration comes just a day after the company signed a $690 million agreement with South Korea's Hanmi Pharmaceutical to get its hands on a Phase II-ready autoimmune drug. The two agreements highlight a growing trend in biopharma: While Western outfits have long been interested in China's commercial appeal, more and more drugmakers and investors are prizing the country's R&D capabilities. Merck ($MRK), Sanofi ($SNY) and Novartis ($NVS) are among the many global giants to blueprint standalone research hubs in China, while venture outfits including OrbiMed have turned a particular focus to biotech startups in the region.

- read the statement

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