Innovent Biologics has entered into a strategic collaboration with US pharmaceutical giant Eli Lilly and Company to jointly advance novel medicines in oncology and immunology, a deal that reflects the growing integration of leading Chinese biopharmaceutical companies into the global innovation ecosystem.

Under the agreement, Innovent will receive a $350 million upfront payment and is eligible for development, regulatory and commercial milestone payments totaling up to approximately $8.5 billion, the company said in a statement on Sunday.

The transaction marks the seventh collaboration between Innovent and Lilly over more than a decade. Notably, Innovent will spearhead research and development from drug discovery through completion of proof-of-concept Phase II clinical trials in China.

This structure highlights a significant shift: multinational drugmakers are showing a growing willingness to engage with innovation originating in China at the molecular stage, rather than waiting for late-stage validation.

"We're delighted to partner with Lilly, our trusted global pharmaceutical partner for over 10 years, to pursue novel medicines to improve treatment outcomes for patients with cancer and immune disorders," said Yu Dechao, Innovent's founder, chairman and chief executive officer.

"This alliance moves beyond traditional licensing to create a seamless, end-to-end innovation ecosystem that combines our agile discovery and early-stage development engine with Lilly's extensive global scale," Yu said, adding that the collaboration "validates Innovent's R&D capabilities".

The cooperation structure mirrors a broad and increasingly common feature of China's outbound biopharma deals, in which domestic companies license overseas rights while retaining control of their home market.

"With a few exceptions, the majority of Chinese companies retain China commercial rights in out-licensing deals, meaning the domestic market continues to be a central part of their value picture,"Zhang Fangning, a partner at McKinsey & Company, said in an interview with China Daily.

The deal comes amid a sharp rise in out-licensing agreements and overseas partnership activity by Chinese innovative drugmakers. According to China's National Medical Products Administration, China's innovative drug out-licensing transactions reached a total value of $135.7 billion in 2025 across 157 deals, compared with $51.9 billion and 94 deals in 2024.

A report from pharmaceutical consultancy PharmCube indicates that the surge was driven primarily by a concentration of large transactions among a small group of leading Chinese companies. The top 10 companies accounted for around 60 percent of total deal value, while nearly half of participating firms recorded transactions below $1 billion, contributing only about 7 percent of the aggregate amount.

Many of the largest transactions were concentrated in oncology immunotherapy, antibody-drug conjugates and other advanced modalities. Increasingly, these deals involved earlier-stage assets and deeper development cooperation, the report said.

"China has become a meaningful source of innovation for global companies," Zhang told China Daily."Out-licensing will remain important, but it's now part of a broader globalization strategy … What matters is the underlying depth of the pipeline and the ecosystem's ability to integrate globally."