Lilly Seals Research Partnership In Shanghai

Eli Lilly & Co. and Hutchison MediPharma have agreed to collaborate in the research and development of new drugs. Under the deal, Shanghai-based Hutchison will come up with new clinical candidates in exchange for an upfront payment, R&D support fees, and milestone payments amounting to as much as $29 million per candidate. In addition, Hutchison will earn royalties in the event that drugs are commercially launched. Clinical development will be Lilly's responsibility.

Lilly has conducted drug research in Shanghai for a number of years. It is the exclusive customer of Shanghai ChemExplorer, a contract research firm employing several hundred scientists.

Employing 140 scientists in Shanghai's Zhangjiang Hi-Tech Park, Hutchison MediPharma is a wholly owned subsidiary of Chi-Med. The latter, in turn, is a London-listed holding company focusing on China's pharmaceutical and health care sector. Hutchison Whampoa, one of Hong Kong's largest business groups, owns a majority stake in Chi-Med.

Samantha Du, managing director of Hutchison MediPharma, says her firm aims to "discover and develop innovative medicines to meet global market needs with big-pharma quality, biotech speed, and China's attractive cost base."

Earlier this month, WuXi Pharmatech, probably the largest Shanghai-based drug research firm, made an initial public offering of stock. It counts nine of the world's top 10 drug companies as customers.????