Innovent Biologics Surges After Striking Partnership Deal with Eli Lilly

By Jason Chau

Shares of Innovent Biologics surged after the Chinese drugmaker disclosed a partnership with Eli Lilly to develop new treatments that could generate up to $8.5 billion in milestone payments.

Innovent's shares jumped as much as 8.6% early Monday in Hong Kong before paring gains. The stock was last 7.0% higher.

The rally came after Innovent said Sunday that it and its subsidiaries signed a deal with U.S. pharmaceutical giant Eli Lilly to develop new medicines targeting cancer and immune system diseases globally, marking the seventh collaboration between the two companies.

Under the terms of the agreement, Innovent will lead the development of the new drugs from conception through Phase 2 clinical trials in China, while Eli Lilly will have exclusive worldwide rights to develop and commercialize the treatments outside Greater China.

In exchange, Innovent will receive $350 million upfront and is eligible for milestone payments of up to around $8.5 billion, as well as tiered royalties on sales of each product marketed by Eli Lilly, the Chinese drugmaker said in an exchange filing.

Unlike previous agreements between the two, the new partnership involves both companies jointly developing new drugs, rather than Eli Lilly acquiring rights to an existing Innovent treatment.

Innovent said the collaboration moves beyond licensing agreements to create an end-to-end innovation ecosystem.

"The deal is a positive surprise to the market; while the drug assets and details evolved in the deal are yet to be decided, it's more like a framework deal demonstrating long-term partnership," said Cui Cui, Jefferies' head of Asia healthcare research.

The collaboration is the latest in a long line of licensing deals reached between leading Chinese pharmaceutical companies and global biopharma giants in recent years. Western drugmakers are increasingly seeking to access China's expanding pipeline of cutting-edge therapies and tap its vast, cost-efficient research and development ecosystem.

"We think this deal is another testament to Innovent's R&D platform," said Nomura China healthcare analyst Jialin Zhang, adding that partnering with Eli Lilly improves the clinical and commercial prospects for Innovent's new drugs outside the China market.

Eli Lilly's continued collaboration with Chinese companies also suggests a decoupling between the U.S. and China on life sciences is unlikely to happen in the near term, Zhang said.

Amid market optimism around the sector's rapid growth, the Hang Seng Biotech Index--a key tracker of Chinese companies in the sector--is up more than 9% so far this year, outperforming the broader Hang Seng Index.

Write to Jason Chau at jason.chau@wsj.com

(END) Dow Jones Newswires

February 09, 2026 01:00 ET (06:00 GMT)