New Developments in Pharmaceutical Collaborations
In April, President Trump enacted an executive order that imposed 100% tariffs on imported patented medicines. The goal? Encourage drug manufacturers to shift their operations back to the U.S. – underscoring the notion that medicines should be produced domestically.
Fast forward two months, and one of the nation’s leading pharmaceutical firms signed a massive contract—nearly $3 billion—with a company in Beijing.
On Friday, Eli Lilly finalized a research agreement with Hisco Pharmaceutical. The deal potentially amounts to $3 billion, although neither company has disclosed the specific diseases the new drug will address.
Interestingly, shipments of GLP-1 drugs from China have skyrocketed, reportedly up 44% just in January.
According to Hysco’s press release, the contract encompasses “up to five innovative targeted programs” across various therapeutic areas. The process appears straightforward: the Chinese biotech company develops a drug, with funding provided by American pharmaceutical giants. Hysco will initially receive $87 million, with the remaining funds tied to milestones and a share of future sales.
“This partnership aligns closely with our international development strategy,” stated Hysco’s CEO, Dr. Panke Yang. He further emphasized that partnering with a global leader like Lilly would expedite the development of innovative treatments and enhance patient options worldwide.
Lilly’s recent endeavors are inspired by, well, their blockbuster profits from weight-loss drugs like Zepbound. Almost immediately following Hysco’s announcement, the Indianapolis-based company also approved another drug for short bowel syndrome treatment, secured from South Korea’s Hanmi Pharmaceutical for $1.2 billion. Earlier this year, Lilly entered an $8.5 billion partnership with China’s Innovent Biologics to develop cancer and immune system treatments.
Zepbound costs over $1,000 monthly for those without insurance, while it’s priced at $245 for Medicare patients and can drop to $350 through TrumpRx. Meanwhile, many people have turned to Chinese suppliers, with gray market GLP-1 shipments hitting just $50 per bottle in January.
Lilly isn’t the only company diving into these international partnerships. Pfizer, based in New York, has also signed a hefty $10.5 billion deal with Innovent. They are collaborating on the development of 12 cancer drugs. Additionally, AbbVie from North Chicago has entered a $745 million agreement with Hysco for two non-opioid pain treatments. And back in January, Frasier Life Sciences in the U.S. approved Hysco’s pulmonary assets, which could be worth up to $955 million.
Notably, this trend appears to reflect a growing interest, as more than half of major pharmaceutical companies’ license agreements this year came from China—an increase from 39% last year and just 5% in 2022.
