Innovent inks $11.4 Billion cancer drug deal with Takeda, sets new China biotech benchmark

On October 22, 2025, Innovent Biologics, a leading Chinese biopharmaceutical company, and Takeda Pharmaceutical, a global biopharmaceutical leader, jointly announced a global strategic collaboration to accelerate the worldwide development and commercialization of next-generation immuno-oncology (IO) therapies and antibody-drug conjugates (ADCs).

As part of the transaction consideration, Takeda will pay Innovent an upfront payment of up to $12 billion, inclusive of a $1 billion premium strategic equity investment. Additionally, Innovent is eligible to receive up to $10.2 billion in development and sales milestone payments. The total potential value of this collaboration agreement could reach up to $11.4 billion.

At the heart of this collaboration are three innovative assets from Innovent with global competitiveness—IBI363, IBI343, and IBI3001. These candidates not only represent the cutting edge of current immuno-oncology therapies but also maximize value through a well-orchestrated "portfolio-based" transaction strategy.

IBI363, a first-in-class PD-1/IL-2α-biased bispecific antibody, significantly reduces the toxicity risks associated with traditional IL-2 therapies through its precise "IL-2α-biased" design. By retaining affinity for the IL-2 receptor α chain while weakening binding to the β/γ chains, it enables selective expansion of tumor-specific CD8⁺ T cells without activating peripheral normal T cells. This breakthrough mechanism has demonstrated promising efficacy in hard-to-treat tumors such as PD-1-resistant lung cancer and MSS colorectal cancer, positioning it as a potential "cornerstone of next-generation IO therapy."

It was precisely blockbuster candidates like IBI363 that provided Innovent with crucial leverage during negotiations. For Takeda, which has yet to establish a significant presence in the IO field, this innovative drug targeting the post-PD-1 market perfectly aligns with its strategic goals in oncology and does not conflict with its existing pipeline. By strategically packaging this core asset with other high-potential candidates, Innovent not only increased the overall deal size but also unlocked value for assets that might have been challenging to license out individually in substantial business development transactions.

Under this strategy, IBI343—a CLDN18.2 ADC operating in a highly competitive landscape—found an optimal pathway. This candidate utilizes an innovative topoisomerase I inhibitor as its payload and has already entered Phase III trials for gastroesophageal cancer in China and Japan (G-HOPE-001). Innovent's decision to license ex-Greater China rights to Takeda likely capitalizes on the latter's strong foundation in the Japanese gastric cancer market. This move echoes the successful out-licensing of a similar target ADC by Evopoint Biosciences to Astellas, demonstrating a sharp understanding of regional market dynamics.

As for IBI3001, a dual-targeting EGFR/B7H3 ADC with substantial potential, Innovent demonstrated exceptional asset discipline. Unlike some biotech companies that tend to divest promising early-stage molecules at lower valuations, Innovent granted Takeda only an exclusive option. This approach not only secured a collaborative opportunity but also preserved the future value of this highly promising candidate, which has demonstrated compelling preclinical data.

This strategic combination of a flagship asset complemented by a pipeline portfolio allowed Innovent to maintain strong negotiating leverage in rights allocation. For IBI363, the company insisted on global co-development and a U.S. profit-sharing arrangement; for IBI343, it flexibly licensed out regional rights; while for IBI3001, it preserved future potential through an option agreement.

Through precise product positioning and sophisticated deal architecture, Innovent has not only achieved a total potential transaction value of US$11.4 billion but also demonstrated the growing strategic sophistication and value assessment capabilities of Chinese pharmaceutical companies in global business development transactions.

The breakthrough of this collaboration lies not only in its record-breaking US$11.4 billion valuation but also in Innovent's innovative rights allocation structure.

For the pivotal IBI363 program, Innovent broke away from the conventional model of low royalty rates typically seen in Chinese biotech out-licensing deals by designing a novel "global co-development + U.S. profit-sharing" framework. The two parties will share global development costs in a 40:60 ratio (Innovent:Takeda), while profits or losses in the U.S. market will be shared in the same proportion. Only the ex-Greater China and U.S. commercial rights were licensed to Takeda.

This structure carries forward the pioneering "equal profit-sharing" model established in the CAR-T collaboration between Legend Biotech and Johnson & Johnson, elevating Innovent from a traditional licensor to a co-development partner and creating deep alignment around the long-term value realization of IBI363.

This landmark deal arrives amid an explosive growth phase for Chinese innovative drug out-licensing. The pharmaceutical sector has witnessed a series of significant business development transactions this year: The United Laboratories licensed its innovative GLP-1 drug to Novo Nordisk in a deal worth up to $2 billion; Hengrui Pharmaceuticals entered a over $1 billion collaboration with Glenmark Specialty for its novel drug SHR-A1811; and Harbour BioMed secured nearly $1 billion in overseas licensing for its ultra-long-acting targeting TSLP antibody.

According to China Post Securities research, the total value of Chinese innovative drug licensing agreements approached $66 billion in the first half of 2025 alone, surpassing the full-year 2024 figure. A VCBeat June report further highlighted that over 90% of global top-tier multinational pharmaceutical companies have now established collaborations with Chinese innovators, positioning China as the world's fastest-growing market for innovative drug business development. Within this context, Innovent's $11.4 billion transaction represents not merely an individual breakthrough, but a concentrated manifestation of this industry-wide trend.

Looking ahead, if leading companies like Innovent and Hengrui can consistently deliver blockbuster innovative drugs, we may witness more high-quality collaborations emerging—transcending simple out-licensing to establish global co-creation models based on 40:60 or 50:50 profit-sharing structures. Ultimately, the essence of business development was never merely about completing transactions, but about ensuring Chinese biopharma innovations capture their fair value in the global market and generate returns commensurate with their R&D capabilities.

As more Chinese pharmaceutical companies embark on this path—leveraging product strength to gain value negotiation power—China's innovative drug sector will truly evolve from an "out-licensing wave" to a "value realization wave." This progression will not only bring novel therapies to patients worldwide but also ensure the value of China's pharmaceutical innovation is fully recognized on the global stage.