Lilly Reinforces Chinese Market Commitment Amidst US-China Biotech Tensions

Eli Lilly's CEO, David Ricks, has reaffirmed the company's commitment to the Chinese market during a meeting with China's Commerce Minister Wang Wentao - stating Lilly's intention to increase investments and enhance R&D cooperation. The commitment comes amidst rising U.S.-China geopolitical tensions, and a proposal of a draft U.S. bill that threatens certain Chinese biotech businesses sue to the US’s concerns for its national security and commercial interests.

The following article originally appeared in Fierce Pharma.

At a time of heightened geopolitical tensions between the U.S. and China, Eli Lilly’s CEO said the Indianapolis-based company remains committed to the Chinese market.

David Ricks outlined his commitment during a Thursday meeting with China’s Commerce Minister Wang Wentao, according to a press release from the agency.

Ricks “expressed willingness to increase investment in China and reinforce R&D cooperation” to better serve the Chinese market, the agency said.

Wang, highlighting China’s pharma market as a broad space with room for Lilly and other multinational companies, said he hopes Lilly will continue to invest in China and introduce more drugs, according to the agency’s summary of the meeting. Besides Ricks, Wang also met with CEOs of HP, Visa, Mercedes-Benz Group, semiconductor manufacturer Broadcom, and Estée Lauder this week.

Ricks’ visit to China comes as regulators in the country review several Lilly drug applications. These include weight loss drug Zepbound, Alzheimer’s disease therapy donanemab and BTK blood cancer med Jaypirca.

At the beginning of the year, Lilly installed a new president of its China business, Huzur Devletsah, who previously headed the firm’s Italian operations.

Further, the meeting comes as a draft bill targeting certain Chinese biopharma companies advances in the U.S. Congress. One of the Chinese firms targeted is Lilly’s contractor and partner, WuXi AppTec. The bill, dubbed BIOSECURE Act, aims to block WuXi and other Chinese “biotechnology companies of concern” from getting contracts from federal agencies. If passed in its current form, the bill would also prohibit the targeted firms from working with partners that do business with the federal government, including those who sell drugs to Medicare and Medicaid.

Lilly and WuXi teamed up in 2016 to develop a small-molecule drug for lowering blood lipids. WuXi also helps produce the active ingredient used in Zepbound and its sister diabetes drug Mounjaro, according to Bloomberg.

Lilly officially started operations in China in 1993. In 2022, its China business was hit hard after Chinese authorities put insulins on a national price-cut program known as volume-based procurement. After the initial effect of the hefty discount passed, Lilly saw its China sales bounce back to grow 6% in 2023 to $1.54 billion. Nevertheless, the growth rate was far slower than the entire firm’s 20%.

Meanwhile, the U.S. company hasn’t had the most successful collaborations with Chinese biotechs. Lilly originally partnered with Innovent Biologics on the latter’s PD-1 inhibitor Tyvyt. But it returned U.S. rights to Innovent in 2022 after a high-profile FDA rejection, and it had previously significantly reduced its role in their partnership in China.

Lilly China also holds local rights to Hutchmed’s VEGF inhibitor Elunate (fruquintinib), but it later transferred on-the-ground promotion and detailing responsibilities back to Hutchmed. Takeda in 2023 bought ex-China rights to fruquintinib, which was approved by the U.S. FDA in November as a third-line colorectal cancer treatment under the brand name Fruzaqla.

Lilly-backed Lilly Asia Ventures has also funded several Chinese biotechs, including Abbisko, Carsgen, Chipscreen Biosciences and others.

MAs tensions between China and the U.S. have intensified in recent months, U.S. pharma companies—compared with their European peers—have largely shied away from making major investments or public endorsements of China. It remains to be seen whether Ricks’ meeting and statement will spur similar visits.

Merck & Co., which also works with WuXi, last year surpassed AstraZeneca to become the largest multinational pharma company in China by sales, mainly thanks to the HPV vaccine Gardasil. Merck’s $6.8 billion sales from China in 2023 marked a 31% increase year over year. The New Jersey pharma has also in-licensed several ADCs from China’s Kelun Biotech.

At least one other U.S. pharma giant is eying drug innovation out of China. Pfizer CEO Albert Bourla recently talked about tapping “Chinese science” as a source of new medicines. And the New York pharma’s newly minted oncology chief recently told Fierce Pharma that the company is looking for new deals on antibody-drug conjugates (ADCs), including those from China.

Last year, Pfizer also signed a memorandum of understanding with the Health China Research Center to support public health research and improve the health of rural populations, although no specific investments have been announced so far.

As for European drugmakers, GSK recently inked a high-profile deal with Chongqing Zhifei Biological Products to grow Shingrix in China. As Ricks met with Wang, GSK’s CEO Emma Walmsley also committed to China during her Thursday meeting with Shanghai Mayor Chen Jining, according to a release by the municipal government. And Novo Nordisk just made a large manufacturing investment pledge.

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