Lilly and Junshi Announce $255 Million Collaboration on SARS-CoV-2 Neutralizing Antibody JS016

On May 4, Junshi Biosciences announced that it had recently signed a "Research and Development Collaboration and License Agreement" with Eli Lilly and Company. Under the agreement, both parties will collaborate on the development and commercialization of the SARS-CoV-2 neutralizing antibody ("Junshi COVID-19 Antibody," product code: JS016). Eli Lilly and Company will be granted an exclusive license to conduct research and development activities, manufacture, and sell the Junshi COVID-19 Antibody outside the Greater China region (including Mainland China, Hong Kong, Macau, and Taiwan). In addition, Eli Lilly will subscribe for USD 75 million worth of shares in Junshi Biosciences.

Pursuant to the terms of the agreement, Eli Lilly and Company will pay Junshi Biosciences an upfront payment of USD 10 million. Upon the achievement of specified milestone events for each of Junshi’s COVID-19 antibodies (either as monotherapy or in combination), Eli Lilly will pay milestone payments totaling up to USD 245 million, plus a royalty in the double-digit percentage range on the net sales of such products. Additionally, the two parties will establish a joint steering committee to oversee and coordinate the research and development of Junshi’s COVID-19 antibodies. Junshi Biosciences will collaborate with Eli Lilly and Company to continue advancing the investigational new drug (IND) applications for Junshi’s COVID-19 antibodies.

Eli Lilly and Company has committed to use commercially reasonable efforts to negotiate with Junshi Biosciences, on terms and conditions mutually agreed upon by both parties, to subscribe for newly issued H shares of Junshi Biosciences for USD 75 million (the “Potential Subscription”). The Potential Subscription is subject to the execution of a formal subscription agreement and the satisfaction of the conditions precedent required for entering into such formal agreement.

As disclosed in the agreement, Junshi’s COVID-19 antibody JS016 is a recombinant fully human monoclonal neutralizing antibody that specifically binds to the receptor-binding domain of the SARS-CoV-2 surface spike protein and effectively blocks the interaction between the virus and the host cell surface receptor ACE2. This project was jointly developed by the company and the Institute of Microbiology, Chinese Academy of Sciences.

At the outset of the COVID-19 pandemic, Junshi Biosciences rapidly initiated the development of neutralizing antibodies to combat the virus. Within two months, leveraging its proprietary process platform, the company completed the preclinical studies required for an Investigational New Drug (IND) application, developed and produced antibodies for Good Laboratory Practice (GLP) toxicology studies, and manufactured clinical-grade batches under Good Manufacturing Practice (GMP) conditions. Junshi Biosciences and Eli Lilly and Company planned to submit the IND application and initiate clinical trials in the United States in the second quarter of 2020. Meanwhile, Junshi Biosciences maintained close communication with the Center for Drug Evaluation of the National Medical Products Administration to facilitate the earliest possible submission of the IND application in China. The agreement entered into with Eli Lilly and Company will enable the company to accelerate the global clinical development of Junshi’s COVID-19 neutralizing antibodies.