Investors reacted favorably to the announcement that Chinese biopharmaceutical company Innovent Biologics Inc. (HKSE:01801, Financial) and Eli Lilly and Co. (LLY, Financial) have expanded their licensing agreement for a cancer drug.
The deal gives Indianapolis-based Eli Lilly the rights to the Tyvyt, which the two have been selling in China for a form of lymphoma. Biopharma Dive reoported Eli Lilly and Innovent had already split rights to the drug based on a 2015 agreement. They'll continue to share the profits under the new deal, but Eli Lilly now obtains rights to Tyvyt everywhere outside of China. Innovent received $200 million upfront from Lilly and could be in line for another $825 million if the drug hits specific milestones. Sales of the drug, known as a checkpoint inhibitor, were more than $120 million during the first six months of 2020.
Innovent shares were up slightly on Tuesday, although the stock has gained more than 90% to $6.40 since mid-March. Eli Lilly climbed more than $1.50 on the day.
Eli Lilly recognizes it needs to take some significant steps to boost its position in the field of immunotherapy, which is now a mainstay treatment for cancers of the skin, lung and kidney. The Innovent deal helps, but Lilly has some catching up to do to reach the level of immunotherapy leaders, including Merck & Co. Inc. (MRK, Financial), Roche (RHHBY, Financial), Bristol-Myers Squibb Co. (BMY, Financial) and Regeneron Pharmaceuticals Inc. (REGN, Financial).
Eli Lilly said it plans to test Tyvyt across other tumor types. The company has 21 industry- sponsored studies of the drug and is looking for patients with esophageal, gastric, liver, colorectal and other cancers.
Besides Eli Lilly, Innovent has strategic collaborations with privately-held Adimab, Incyte Corp. (INCY, Financial), Hanmi Science Co. (XKRX:008930, Financial) and other international pharmaceutical companies. In June, Pharmaceutical Technology reported Innovent signed a development partnership with Roche for various cell therapies and bispecific antibodies.
The deal could be quite lucrative. Innovent will create, develop, manufacture and commercialize the products and Roche has an option to license them to develop and introduce the medications in other markets. If it exercises all the options, Roche will pay Innovent $140 million and nearly $2 billion if all the drugs are approved.
Earlier in the year, Innovent struck a regional deal with Alector (ALEC) to develop the latter's cancer drug for the Chinese market.
Disclosure: The author has positions in Eli Lilly and Bristol-Myers.
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