"NVIDIA of the pharmaceutical industry" spent 20 billion yuan to buy the weight-loss drug of a Chinese AI company
Text by | Hu Xiangyun
Edited by | Hai Ruojing
In the field of AI drug development, a transaction worth 20 billion RMB has emerged again.
On the evening of March 29th, Insilico Medicine (HK:03696) announced a collaboration with Eli Lilly. The upfront payment is $115 million, with a total deal value of $2.75 billion, and it also includes potential sales royalties after the product is launched. The core of the transaction is a pre - clinical oral GLP - 1 drug. In addition, based on Insilico Medicine's Pharma AI technology platform, the two parties will also carry out multiple R & D collaborations "around the targets selected by Eli Lilly" in the future.
On the same day, Insilico Medicine's annual report showed that its total revenue in 2025 was $56.2 million, and the total value of BD licensing contracts as of the reporting period was $2.174 billion. In other words, for this single transaction, the upfront payment is twice the company's annual revenue, and the total value directly exceeds the sum of all previous BD amounts.
On March 30th, Insilico Medicine's stock price rose by up to 15% during intraday trading and closed up 2%. Overseas, this transaction triggered an antitrust review by US regulatory authorities due to the "large cash scale", and it once sparked rumors that "Insilico Medicine would be acquired by Eli Lilly".
On March 30th, Insilico Medicine held a media communication meeting. Alex Zhavoronkov, the founder and CEO, said, "We will adhere to independent development. Moreover, if a single BD deal can reach the current value, the acquisition valuation should be even higher. In terms of this cooperation, Eli Lilly, as the 'Nvidia in the pharmaceutical industry', has a strong endorsement effect. In the past two days, we have already received communication and consultation invitations from more large overseas pharmaceutical companies."
The form of this transaction is similar to the BD cooperation structures of recent deals such as Innovent Biologics and Eli Lilly ($8.85 billion), and Frontier Biotechnologies and GSK ($1.003 billion). The licensed products are all in the early development stage. Structurally, it is no longer a one - time purchase. Instead, the licensor leads the early clinical verification and then hands it over to the multinational pharmaceutical company.
"Currently, Insilico Medicine's clinical team has only more than 20 people, and there is no commercialization team. Even if there are 1 - 2 commercialized products on the market, it is difficult for the sales revenue to cover the sales cost. Therefore, in the short term of 2 - 5 years, BD will still be the company's main source of income. But in the long run, after BD can continuously generate stable cash flow, we will have the ability to build a global clinical team and a commercialization team, and even support us to independently carry out large - scale global Phase 3 clinical trials." Ren Feng, the co - CEO and CSO of Insilico Medicine, said.
Since last year, AI - native biotech companies have gradually become a new force in the wave of Chinese innovative drug BD. Previously, companies such as Jingtai Technology, Huashen Intelligence Medicine, and Yuansi Biotech have all won orders with considerable upfront payments and a total value of billions of dollars. This cooperation between Insilico Medicine and Eli Lilly is a strong footnote to the current realization of the value of AI drug development.
"There is at least a 60% chance of getting milestone revenues"
Insilico Medicine actually did not disclose specific information about the cooperation pipeline in the announcement. However, by comparing the information on Insilico Medicine's website and financial reports, it can be inferred that the transaction target is an oral GLP - 1 inhibitor.
The left picture shows the pipeline schematic on Insilico Medicine's official website (screenshot time: March 30, 2026); the right picture is Insilico Medicine's 2025 annual report
Driven by the indication of weight loss, oral GLP - 1 is currently a key competitive point in the global pharmaceutical market. The products in the late - stage clinical trials are mainly "daily formulations". In the first echelon, Novo Nordisk's oral semaglutide weight - loss drug has been approved in the United States. Eli Lilly's Orforglipron has also submitted a marketing application in China and the United States. The industry expects its annual sales peak to reach $40 billion, approaching that of tirzepatide.
Among domestic enterprises, the products of Hengrui Medicine and Ciyi Biotech/AstraZeneca have also entered the late - stage clinical trials.
At this time, Eli Lilly's purchase of a pre - clinical oral GLP - 1 weekly formulation shows its recognition of this pipeline and the AI - accelerated capabilities behind it.
This pre - clinical oral GLP - 1 is one of the 8 cardiovascular and metabolic product portfolios on the Pharma AI platform. Pharma AI can be regarded as Insilico Medicine's ace. More than 20 clinical/IND - stage assets have been developed based on it. Among them, 7 have created a cash flow of $130 million in upfront payments for the company through BD licensing, with a total value of $2.174 billion.
The innovation point of this licensed product is that it is expected to be administered once a week, far exceeding the existing daily - formulation products in terms of compliance. At BioEurope at the end of last year, Insilico Medicine also said that the drug "has a weight - loss effect comparable to or better than existing oral GLP - 1R agonists".
From the buyer's perspective, Eli Lilly has been quite aggressive in its layout of AI technology in the past two years.
Since hiring its first Chief AI Officer, Thomas Fuchs, at the end of 2024 and fully launching its AI strategy, Eli Lilly has started to focus on "infrastructure" building, whether it is the underlying computing power or the mid - stream data verification. For example, at the end of last year, Eli Lilly announced a cooperation with Nvidia to build an "AI factory" with more than 1000 B300 GPUs to provide computing power. An AI drug development practitioner introduced that this kind of reserve can reach the top level among pharmaceutical companies, which is sufficient for tens of millions of drug screenings and designs.
At the beginning of 2026, Eli Lilly also announced that it will invest $1 billion with Nvidia in the next 5 years to jointly build an AI joint innovation laboratory to create a "wet - dry laboratory closed - loop" system, fully embedding AI into the entire process from molecular discovery, clinical trials to production and manufacturing.
Externally, Eli Lilly has been continuously expanding its BD cooperation to lock in innovative pipelines. The interaction between Insilico Medicine and Eli Lilly has also deepened during this process.
In 2023, Eli Lilly actually started using Insilico Medicine's Pharma AI platform, but in the form of software services. By 2025, the cooperation began to deepen. First, in November, the two parties signed a small - scale order worth $100 million based on Pharma AI to test the waters for cooperative R & D. At the end of December, Eli Lilly's headquarters appeared on the list of cornerstone investors in Insilico Medicine's Hong Kong stock offering, with a subscription amount of $5 million, which is objectively not very high.
However, at that time, an industry investment person analyzed to 36Kr that multinational pharmaceutical companies generally do not position themselves as pure financial investors. Eli Lilly's move "is probably to occupy a position for subsequent product cooperation".
Now, this R & D cooperation worth a total of $2.75 billion is also a chapter in the cooperation story.
Regarding the future R & D plan and milestone revenue expectations for this pipeline, Ren Feng said that the BD project plan will fully consider feasibility. "From the perspective of product quality and R & D progress, we have at least a 60% - 70% chance of reaching the milestones. There is no big problem with this."
When "joint development" - style BD becomes the norm
In this transaction, in addition to a confirmed oral GLP - 1 weekly formulation, in the future, Insilico Medicine and Eli Lilly will also carry out multiple R & D collaborations "around the targets selected by Eli Lilly" based on the Pharma AI technology platform.
This form of transaction is similar to recent collaborations such as Innovent Biologics/Eli Lilly ($8.85 billion) and Frontier Biotechnologies/GSK ($1.003 billion).
They are often based on cooperation on multiple products, and the licensed products are all in the early development stage. Innovent Biologics even completed the transaction without a pipeline. Structurally, it is no longer a one - time purchase. Instead, the licensor leads the early clinical verification and then hands it over to the multinational pharmaceutical company.
Many practitioners in the field of innovative drugs unanimously believe that the interesting part of this model is that multinational pharmaceutical companies are equivalent to "treating Chinese innovative pharmaceutical companies as their 'outsourced' R & D centers".
However, it is not exactly the same as the traditional CXO model. The licensor "has the right to make independent decisions" in R & D and enjoys substantial rights and interests in the subsequent development and commercialization of the product. In contrast, traditional CXOs generally only follow a detailed work content list to proceed, and "will not invest their own funds in R & D".
An innovative pharmaceutical company person mentioned that recently, when contacting multinational pharmaceutical companies, they also encounter such demands. "On the one hand, the transaction consideration will be much lower than that for purchasing a mature project, but the possibility of doubling the return is greater. At the same time, it can effectively supplement the R & D system of multinational pharmaceutical companies, because the same amount of funds in R & D centers in Europe and the United States will not be as efficient."
During the process, multinational pharmaceutical companies often "do not completely let go". For Chinese innovative pharmaceutical companies, this becomes a good opportunity to transform cooperation experience into their own capabilities and learn the operation methods of the overseas market. At the same time, they can also get some financial support to avoid dragging down the financial statements of listed companies. For example, Innovent Biologics previously mentioned that the upfront payment "is sufficient to cover the clinical costs paid by the company".
This is also a point that many innovative pharmaceutical companies pay great attention to. In the past two years, the overseas BD transactions of innovative drugs have been in full swing, giving many companies "the first opportunity to cooperate with global leading pharmaceutical companies according to international standards". But in this process, have Chinese companies no longer only aimed at reaching BD transactions and obtaining large - scale milestone payments, but instead tried to take a step further, carry out joint development, and build certain global operation capabilities?
Recently, a BD head of a multinational pharmaceutical company's China region mentioned to 36Kr that from the perspective of bringing innovative products to the market faster, "we also hope to help one or more Chinese innovative pharmaceutical companies achieve this goal in the joint development."
However, it is not easy to cross this threshold. R & D capabilities, global thinking, and even the accumulation of trust with multinational pharmaceutical companies are all indispensable. Taking Eli Lilly as an example, Innovent Biologics and Insilico Medicine, which have intensive cooperation with it, basically have these characteristics.
Insilico Medicine and Eli Lilly have a history. At present, BD is an important channel for Insilico Medicine to realize its commercial value. Therefore, the company did not choose to find an intermediary. Instead, Alex Zhavoronkov led the team directly. Moreover, he has known Jiye Shi, the head of Eli Lilly's computer - aided design and automation platform, and Andrew Adams, the vice - president of Eli Lilly's molecular discovery, for many years. This may be an important opportunity for Insilico Medicine to maintain communication and cooperation with Eli Lilly.
This time, Ren Feng also mentioned that platform - type AI pharmaceutical companies and mature pharmaceutical companies can give full play to their different advantages in the early R & D or clinical and commercial verification stages, which can make "the overall R & D efficiency in the industry higher and higher".