Abbisko Therapeutics entered a strategic research collaboration with Eli Lilly worth up to $1.9 billion in milestone payments. The Shanghai-based oncology biopharma will use its drug discovery platform for Lilly-selected targets. Shares rose 4.4% in Hong Kong trading.
Abbisko Therapeutics entered a strategic research collaboration with Eli Lilly that could be worth as much as $1.9 billion, deepening a partnership that began with a 2022 small-molecule licensing agreement.
"This collaboration with Lilly is expected to advance multiple innovative programs and further strengthen Abbisko's global innovation strategy and long-term value creation potential," the company said in a statement Wednesday.
Under the agreement, Abbisko will use its early-stage drug discovery platform and R&D ecosystem to conduct research and early development for novel drug programs directed against disease targets selected by Lilly. The Shanghai-based oncology biopharma will receive an upfront payment — the amount of which was not disclosed — and is eligible for development, regulatory and commercial milestone payments totaling up to about $1.9 billion. Abbisko will also receive tiered royalties based on annual net sales of any products that emerge from the collaboration.
The deal builds on a 2022 global collaboration between the two companies focused on a novel small-molecule therapeutic. Abbisko, founded in April 2016 by a group of drug hunters from top multinational pharmaceutical companies, has built an extensive pipeline centered on precision oncology and immuno-oncology. The company's shares rose 4.4% in Hong Kong trading Wednesday, with short selling accounting for 11.1% of volume, giving it a market capitalization of about HK$6.5 billion. Analysts tracked by TipRanks rate the stock a Buy with a price target of HK$27.10.
The partnership marks one of the largest biotech licensing deals involving a China-based company this year, showing the growing role of Chinese drug developers in the global pharmaceutical supply chain. For Eli Lilly, which became the first drugmaker to reach a $1 trillion market valuation in November 2025, the deal provides access to early-stage assets across multiple targets with minimal upfront risk, supplementing its internal R&D pipeline. The $1.9 billion milestone ceiling, while substantial, reflects the high-risk nature of early-stage drug development, where most candidates fail before reaching the market. A Pfizer executive said this week that China is outpacing Europe in drug innovation and development, a sign of the broader trend of Western pharma turning to Chinese biotechs for pipeline replenishment.
The deal makes Abbisko a more attractive partner for large pharma companies seeking early-stage pipeline assets. Investors will watch for updates on which specific disease targets Lilly selects and whether the partnership expands beyond the initial scope. The agreement does not trigger notifiable transaction requirements under Hong Kong exchange rules, the company said.
This article is for informational purposes only and does not constitute investment advice.
