The Indiana-based pharmaceutical company Eli Lilly (LLY, Financial), has recently signed a major deal with the Chinese biopharmaceutical major, Innovent Biologics for growing the market share in two of its major operating business segments: immunotherapy treatment and biosimilar drug business lines. In fact, this deal worth $456 million marks one of the largest deals to date signed between a Western company and a Chinese company to work in collaboration for drug development and commercialization. Let’s quickly peek in and find out what facts have been shared on this collaborative deal by the management of these companies, and how the deal is important for improving Lilly’s sales in the coming days.
A close look at the deal
The deal between Eli Lilly and Innovent showcases the solid interest of Western pharmaceutical companies to invest in the Chinese pharmaceutical space.
As per the terms of the deal, Innovent Biologics would be paid an upfront payment of $56 million, followed by future payments to the tune of $400 million as part of the various milestones reached during development, regulatory approval and sales of the pre-clinical immuno-oncology molecule.
As per the deal, Innovent would be entitled to receive sales royalties, as well, for the commercialization of the specific products developed by the companies’ joint efforts. News sources have confirmed that Innovent would be responsible for the development and manufacturing processes of the investigational candidates, while Eli Lilly would be responsible for the commercialization of such molecules in markets worldwide aiding to serve global patients suffering from major cancer ailments.
This deal is expected to strengthen the presence of both the companies in the Chinese oncology space. At least three oncology molecules are expected to be manufactured through this collaborative effort in China.
Benefitting Lilly in the long run
Alfonso Zulueta, Senior Vice President and President of Lilly Emerging markets, emphasized on the terms of the agreement and commented – “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.”
These words clearly reflect that Lilly stands at a major advantage from this signed deal with the leading biopharmaceutical major in China. The collaboration could aid in improving the sales of Lilly’s oncology drugs in the long term, and thus truly provides the opportunity to outgrow in the segment.
As per the partnership agreement, both companies would contribute specific cancer drug candidates for the development of potential cancer treatments. Lilly would give its cMet monoclonal antibody for finding a treatment for non-small cell lung cancer (NSCLC) to Innovent, whereas the latter would exchange rights on its monoclonal antibody targeting the cancer antigen CD20 as well as three of its bispecific antibodies that are currently under pre-clinical testing. Thus, Lilly that already holds a robust oncology pipeline stands to benefit in China as well as outside China through this collaboration with the leading Chinese biopharmaceutical company.
Last word
Lilly looks well-poised for further growth in the oncology segment past this collaboration and that can be well-hinted in the words of CEO of Innovent Biologics, Micheal Yu, who commented – “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. 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…” On March 20, Lilly’s stock also moved northwards and shot up 2.56% on news of the largest-alliance with a Chinese drug maker. There is surely more to state on the deal after all the details are shared by the management as several terms are still under wrap by both the companies’ collaborating to grow their oncology business larger than existing rivals in the same space.
