Eli Lilly Develops Shanghai Link (China)

A drug-development partnership between Eli Lilly & Co. of the U.S. and a Shanghai pharmaceuticals company reflects China's growing potential as a low-cost center for biotechnology research. Lilly will work with a unit of Hutchison China MediTech Ltd., known as Chi-Med, to develop drugs to treat cancer and inflammatory diseases. Lilly will hand over preclinical research and development on several compounds to the Chinese company. Chi-Med is a subsidiary of Hutchison Whampoa Ltd., the conglomerate controlled by Hong Kong billionaire Li Ka-shing. Complete financial terms weren't disclosed, but Lilly agreed to pay $20 million to $29 million for each compound developed through the partnership, as well as an upfront fee and continuing research support. Chi-Med would get a cut of royalties from any successful drugs developed through the collaboration. Chi-Med, whose products include a heart pill made from deer musk glands, has been drawing attention from some of the world's largest pharmaceuticals companies, eager to tap Chi-Med's research expertise, low-cost base and library of 10,000 traditional Chinese herbal compounds that may have applications in Western medicine. "The Lilly deal is a sign of the quality of the work that's being in done in China," says Ibraheem Mahmood of Investec Securities in London. "Big pharmaceutical companies can see there are research capabilities there, and a burgeoning pipeline of new products." (Click here for more - May Require Paid Subscription