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Xinmei Shen

Chinese biotech deal making is moving beyond the licensing of individual drug candidates, as the country transforms from a follower to a global innovation leader, according to analysts.
The latest transaction underscores that shift. Beijing-based cancer drug developer InnoCare Pharma said on Thursday that it had entered into a strategic research collaboration and licensing agreement with US pharmaceutical giant Eli Lilly that could be worth up to US$3.35 billion.
InnoCare said it would use its drug discovery platform to identify and advance compounds against up to five targets.
The companies did not disclose the specific therapeutic areas covered by their partnership, saying only that the new drugs would seek to “address critical unmet medical needs”.
China’s biotech sector had shifted from “speed-driven replication to differentiated innovation”, said Cui Cui, head of Asia healthcare research at Jefferies, in a research note on Thursday.
The transition was fuelling expectations that more globally significant drug-development partnerships would originate from the country, Cui added, citing private discussions at the investment bank’s APAC Healthcare Conference in Shanghai earlier this week.
Many Chinese biotech companies initially relied on out-licensing to fund their pipelines, a model in which a developer sells the rights to an early-stage drug candidate to another company, which then undertakes global development and commercialisation.
However, as their resources and ambitions expanded, companies had increasingly moved towards co-development arrangements and broader platform partnerships, Cui said.
The InnoCare deal would see Eli Lilly pay US$100 million up front, with the Chinese biotech firm eligible for up to US$3.25 billion in development and commercialisation milestone payments, InnoCare said in a statement on Thursday. It would also receive “single-digit tiered royalties” based on annual net product sales.
The figures reflect the rising quantity and quality of China’s innovative drug research
Jialin Zhang, Nomura
Recent deals, including Jiangsu Hengrui Pharmaceutical’s collaboration and licensing agreement with US pharmaceutical giant Bristol Myers Squibb (BMS) worth up to US$15.2 billion, also showed how quickly Chinese biotech companies were broadening their approach to global deal making, Cui said.
BMS in May committed US$600 million in upfront payments to Hengrui – China’s largest drug maker by market capitalisation – to advance 13 early-stage programmes spanning oncology, haematology and immunology. Five of those assets would be jointly developed using Hengrui’s discovery platforms.
Chinese research accounted for 29 of the 96 late-breaking abstracts scheduled for presentation at the European Society for Medical Oncology (Esmo) Congress 2026, which will be held in Madrid in late October, said Jialin Zhang, head of China healthcare research at Nomura, in a report on Wednesday. They included five of the 12 studies selected for the prestigious presidential symposium.
The figures reflected the “rising quantity and quality of China’s innovative drug research”, Zhang said.


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InnoCare’s pact with Eli Lilly, potentially worth up to US$3.35 billion, highlights a shift towards bigger partnerships, analysts say


InnoCare’s pact with Eli Lilly, potentially worth up to US$3.35 billion, highlights a shift towards bigger partnerships, analysts say.


China’s biotech firms move up value chain as drug deals evolve beyond licensing: analysts

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}InnoCare’s pact with Eli Lilly, potentially worth up to US$3.35 billion, highlights a shift towards bigger partnerships, analysts say

InnoCare’s pact with Eli Lilly, potentially worth up to US$3.35 billion, highlights a shift towards bigger partnerships, analysts say