China's Innovent Strikes Cancer Drug Deal With Takeda for Up to $11.4 Billion — Update

By Jason Chau and Fabiana Negrin Ochoa

Chinese drugmaker Innovent Biologics could receive up to US$11.4 billion from a cancer-drug partnership with Japan's Takeda Pharmaceutical, marking the latest in a wave of tie-ups between Chinese biotech firms and global pharmaceutical majors.

Under the terms of the deal, Innovent will receive $1.2 billion upfront and is eligible for milestone payments of up to $10.2 billion, the Suzhou-based company said in an exchange filing.

Takeda will also make a $100 million equity investment in Innovent as part of the partnership, which covers two of the Chinese company's oncology pipeline assets.

Investor interest in Chinese pharmaceutical firms has been rising, driving the Hang Seng Biotech Index up nearly 90% so far this year. Western drugmakers seeking access to China's emerging pipeline of innovative therapies have been striking collaborations with local companies, even amid ongoing global trade tensions.

In June, AstraZeneca entered a partnership with China's CSPC Pharmaceutical valued at up to $5.33 billion, while industry heavyweights Pfizer and Eli Lilly forged partnerships with Chinese firms recently too.

Innovation gains among Chinese drugmakers have increasingly caught global attention, Citi analysts said in a report.

Multinational companies "continue to invest in China's biotech assets due to their high potential, cost-effectiveness, good clinical data & IP, and clean deal structure," wrote Citi's John Yung and others.

While geopolitical risks exist, drugs originating in China have become an important source of new assets for global pharmaceutical companies facing patent expirations and pricing pressures, the analysts said.

By 2040, drugs developed in China could account for 35% of approvals by the U.S. Food and Drug Administration, up from about 5% today, according to Morgan Stanley Research.

Under the Innovent-Takeda agreement, the Japanese drugmaker will co-develop IBI363, one of Innovent's late-stage investigational drugs, initially targeting non-small cell lung cancer and colorectal cancer. The companies will jointly commercialize the drug in the U.S., while Takeda will have exclusive commercialization rights outside Greater China and the U.S.

Takeda will also gain exclusive global rights to develop, manufacture and commercialize another Innovent oncology asset, IBI343, outside Greater China. The Osaka-based firm plans to expand the drug's applications to first-line gastric and pancreatic cancers, according to the filing.

The two drugs "have the potential to address critical treatment gaps and transform Takeda's oncology portfolio," said Teresa Bitetti, president of Takeda's global oncology business unit, in a press release.

The partnership also includes an option for collaboration on an early-stage anti-tumor treatment program.

For Innovent, the agreement represents a "crucial step" in its global expansion, said Dr. Hui Zhou, the company's chief R&D officer for its oncology pipeline.

Innovent's shares jumped as much as 10% in Hong Kong on the news before reversing gains, likely on profit-taking and broader risk-off sentiment.

Citi analysts called the pullback a buying opportunity.

Analysts Wangbin Zhou and colleagues attributed the muted reaction to concerns that Takeda isn't a leading player in oncology and to the high costs associated with global trials.

However, they said Takeda's management has deep experience in immuno-oncology and argued the partnership could help position Innovent as a global player.

"China biotech is no longer merely a regional story," said Morgan Stanley analyst Jack Lin.

Write to Jason Chau at jason.chau@wsj.com and Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

October 22, 2025 06:37 ET (10:37 GMT)

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