UBS: INNOVENT BIO's collaboration with Eli Lilly is expected to have upward potential for drug advancement targets

According to a research report by UBS, INNOVENT BIO (01801.HK) has reached a collaboration with Eli Lilly (LLY.US) on multiple early-stage oncology and immunology assets. The agreement includes an upfront payment of $350 million, potential milestone payments of up to $8.5 billion, and tiered royalties based on net sales.

The firm holds a positive view on the seventh collaboration between the two companies and believes that the establishment of a new company and a co-development model represents a new cooperation model compared to previous external licensing agreements. INNOVENT BIO noted that the number of potential assets in this collaboration is fewer than similar collaborations in the industry, and the financial terms are favorable. More importantly, the firm observed that the potential assets include new assets that have not appeared in INNOVENT BIO's R&D pipeline, providing upward space for the company's original guidance of advancing 8 to 10 candidate drugs into clinical stages each year.

The company maintains its sales target of RMB 20 billion for 2027 and plans to negotiate for the inclusion of mazdutide for diabetes indications in the national medical insurance drug catalog this year. For earlier-stage assets, the firm expects about 10 assets to update PoC data from this year to early next year and anticipates that about 10 candidate drugs will enter first-in-human trials. The firm currently sets a target price of HKD 137.4 for the company and a "Buy" rating