Eli Lilly Strikes AI Drug Discovery Deal With InSilico Worth Up to $2.75 Billion — Update

By Jason Chau

Eli Lilly signed a drug discovery deal with InSilico that the Hong Kong-listed company says could be valued at as much as $2.75 billion, as global pharmaceutical giants continue to tap China's drug development pipeline.

Under the agreement announced Sunday, InSilico will receive an upfront payment of $115 million and is eligible for additional milestone payments that could put the total deal value at about $2.75 billion, along with tiered royalties on future sales, it said in an exchange filing.

Eli Lilly will obtain exclusive worldwide rights to manufacture and sell best-in-class oral treatments across multiple therapeutic areas discovered using InSilico's artificial intelligence model, Pharma.AI.

The companies will also work on multiple research-and-development programs focused on targets selected by Lilly.

Shares of InSilico, which specializes in developing drug discovery technology powered by AI and automation, surged 15% in early trade on Monday before paring gains. The stock was last up 4.4%.

InSilico, which conducts its drug R&D in China and is backed by Hong Kong government's investment arm, is headquartered in Cambridge, Mass., and has operations across North America, Greater China and the Middle East.

The deal marks Lilly's latest effort to tap China's vast pharmaceutical research base. The agreement extends Lilly and InSilico's partnership, which began in 2023, and builds on their AI drug discovery deal announced late last year, valued at up to $100 million.

The U.S. drugmaker has pledged to invest $3 billion to expand its supply-chain capacity in the country. It has also struck several high-profile deals with Chinese drugmakers, including a partnership with Innovent Biologics to develop new treatments targeting cancer and immune system diseases that could be worth up to $8.5 billion.

China has become a major hub for drug innovation in recent years, prompting global drugmakers to sign a flurry of licensing deals with Chinese companies.

AstraZeneca has disclosed plans to invest $15 billion in China, alongside a licensing deal worth up to $4.7 billion with CSPC Pharmaceuticals inked earlier this year. Meanwhile, Japan's Takeda Pharmaceutical struck a deal valued at up to $11.4 billion with Innovent late last year.

Growth in Chinese companies' development of first-in-class drug candidates has significantly outpaced that of their counterparts in the U.S., Europe and Japan, said Cui Cui, Jefferies's head of Asia healthcare research.

"We believe Chinese biotechs are reshaping the U.S. biopharma landscape," she said, adding that assets from China are easing pricing pressures for multinational drugmakers in a timely and cost-effective way.

"Insilico's AI-enabled discovery capabilities represent a powerful complement to Lilly's deep expertise in clinical development across multiple therapeutic areas," said Andrew Adams, Eli Lilly vice president of molecule discovery.

InSilico raised 2.28 billion Hong Kong dollars, equivalent to US$291.1 million, in its initial public offering in the Asian financial hub last year. The IPO was backed by Eli Lilly's Asian venture arm, in addition to investors including Tencent and Temasek Holdings.

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

(END) Dow Jones Newswires

March 30, 2026 00:10 ET (04:10 GMT)