Shanghai Biotech Abbisko Therapeutics Secures RMB 12.9 Billion Partnership With Eli Lilly

On June 24, Abbisko Therapeutics announced that it had entered into a strategic research collaboration and license agreement with Eli Lilly. Under the agreement, the two parties will collaborate on the development of innovative drugs focused on multiple disease targets, jointly advancing novel candidate drugs with global potential.

Abbisko Therapeutics and Eli Lilly will leverage their respective strengths in drug discovery, research and development, and global development to accelerate the advancement of innovative therapeutic solutions and bring new treatment options to patients worldwide.

Under the terms of this agreement, Abbisko Therapeutics will leverage its early-stage drug discovery platform, innovative R&D system, and extensive development experience to conduct new drug discovery and early development activities focused on disease targets selected by Eli Lilly.

Abbisko Therapeutics will receive an upfront payment and is eligible for further payments upon achieving subsequent development, regulatory, and commercialization milestones, with a potential total value of $1.9 billion (approximately RMB 12.9 billion).

Furthermore, Abbisko Therapeutics will also be entitled to receive tiered sales royalties based on the annual net sales of products resulting from this collaboration.

The connection between Abbisko Therapeutics and Eli Lilly dates back to the early days of the company's founding.

In 2016, as Abbisko had just established its presence in Zhangjiang to initiate R&D activities, Lilly Asia Ventures (LAV) completed its first round of early-stage investment, becoming one of the company's early shareholders. In 2021, when Abbisko filed for its initial public offering (IPO) on the Hong Kong Stock Exchange, LAV further increased its stake by participating in the public offering as a cornerstone investor, thereby accompanying the company throughout its journey from a start-up R&D enterprise to its listing on the public capital market.

It should be clarified that Lilly Asia Ventures (LAV) is an independently operated biomedical investment platform. Although it and Eli Lilly and Company operate as separate entities, their strategies are highly aligned: LAV is responsible for identifying and incubating high-quality early-stage biotech companies in China, while Eli Lilly subsequently integrates the R&D pipelines of these portfolio companies through industrial collaborations, thereby creating a closed loop of "capital incubation + industrial commercialization."

One of the reasons for Abbisko Therapeutics' rapid development can also be attributed to this synergistic model. The support from long-term capital has not only provided stable funding for Abbisko's sustained high R&D investment, but also established a natural foundation of trust for future pipeline collaborations between the two parties.

Abbisko Therapeutics' pipeline collaboration with Eli Lilly is currently divided into two phases, with the scope of cooperation and transaction volume achieving leapfrog expansion.

The first phase of collaboration was implemented in January 2022, at which time the two parties only locked onto undisclosed targets within the cardiometabolic field and established a targeted small-molecule R&D alliance. This early-stage cooperation focused on a single disease track and constituted a small-scale, target-oriented R&D partnership.

At that time, the division of responsibilities was clearly defined: Eli Lilly provided early-stage discovery data related to this target, along with additional disease-related knowledge and expertise, while Abbisko Therapeutics was responsible for leveraging its proprietary drug discovery platform to further advance the discovery and development of small-molecule drugs.

If Abbisko Therapeutics successfully advances the compound to the agreed-upon milestone, Eli Lilly will have the right to further develop and commercialize it, with a corresponding total potential consideration of $258 million. If Eli Lilly chooses not to advance the compound, Abbisko Therapeutics will retain the right to further develop and commercialize it.

After a four-year interval, the 2026 upgrade of this collaboration features comprehensive expansion, with the core change being the shift from "single-target directed R&D" to "multi-disease target R&D collaboration."

Under the agreement framework, Abbisko Therapeutics will leverage its early-stage drug discovery platform and innovative R&D system, combined with extensive experience in new drug development, to conduct drug discovery and early-stage research and development for new drug projects targeting disease indications selected by Eli Lilly. The total transaction value has also increased significantly, with the potential collaboration amounting to $1.9 billion.

Regarding this deepened collaboration, Abbisko Therapeutics stated that, leveraging its continuously evolving drug discovery platform, extensive R&D experience, and proven execution capabilities, the company is continually expanding its global partnership network and accelerating the translation of scientific innovations into therapeutic advancements. This collaboration with Eli Lilly is expected to drive multiple innovative projects, further strengthening the company's global innovation strategy and its potential for long-term value creation.

For Abbisko Therapeutics, this platform-based collaboration serves as a validation of its in-house drug discovery system.

The company's founding team members all possess extensive experience in small-molecule R&D at multinational pharmaceutical companies. Over the past decade since its establishment, the company has built a comprehensive pipeline focused on precision oncology and tumor immunotherapy, generating more than ten candidate molecules to date. Multiple projects have entered global multicenter clinical trials, demonstrating the company's stable and replicable capability for early-stage molecule discovery.

For a long time, Abbisko Therapeutics has primarily focused its pipeline on oncology. The collaboration with Eli Lilly enables simultaneous entry into cross-disease areas such as metabolism, thereby broadening the application scenarios of its platform. Meanwhile, the upfront payment and ongoing milestone payments will continuously support the clinical advancement of its internal oncology pipeline, alleviating cash flow pressures associated with R&D.

For Eli Lilly, this collaboration precisely complements its R&D portfolio. Multinational pharmaceutical companies face high costs and long timelines in independently identifying novel, difficult-to-drug targets. In contrast, the front-end R&D platforms of Chinese biotech firms offer advantages such as large-scale screening and low-cost wet-lab experiments. By outsourcing early-stage discovery through partnerships, Eli Lilly can rapidly expand its pipeline reserves without bearing the fixed costs of building a large-scale medicinal chemistry team in-house.

Leveraging its long-term partnership with Abbisko Therapeutics, Eli Lilly can steadily and continuously access a diverse pipeline of small-molecule candidates spanning multiple therapeutic areas, including oncology and metabolic diseases, thereby mitigating pressures associated with patent cycles.

Looking at the cross-border licensing market over the past two years, there has been a clear shift in the deal focus of MNCs. Previously, MNCs preferred acquiring mature clinical pipelines in Phase II/III to directly shorten the time to market. However, this year, Hengrui, Haisco, and Abbisko Therapeutics have successively secured significant early-stage platform collaborations. Leading pharmaceutical companies are collectively moving their strategic layout upstream to the drug discovery stage, competing for high-quality local front-end R&D resources.

At the sector level, small-molecule discovery platforms have emerged as a key focus in dealmaking, primarily due to their shorter development cycles and higher platform reusability, which align with MNCs' need to rapidly bolster their pipelines. Meanwhile, collaborative initiatives between industrial capital and pharmaceutical entities are increasingly common. Healthcare funds such as Lilly Asia Ventures and Hillhouse Capital continue to increase their investments in local R&D-driven biotech companies, subsequently facilitating industrial collaborations with their parent companies to establish a complete innovation incubation loop.

From the perspective of tiering among Chinese pharmaceutical companies, enterprises equipped with comprehensive, proprietary drug discovery platforms and seasoned R&D teams from MNCs are more likely to secure substantial, long-term collaborations. In contrast, homogeneous pipelines that merely follow existing targets without independent molecular optimization capabilities will not command high valuations in overseas markets. In the future, the core competitiveness of cross-border licensing will no longer rely on data from individual pipelines, but rather on the ability to consistently produce differentiated, source-level molecules; thus, platform value will far exceed the value of any single product.

The finalized multi-target platform collaboration between Eli Lilly and Abbisko Therapeutics, valued at up to $1.9 billion, represents a milestone achievement stemming from a decade of capital support and two rounds of R&D synergy. It also signifies that China's front-end small-molecule drug discovery capabilities are gaining large-scale recognition from leading global pharmaceutical companies.