Eli Lilly Ties Up With Shanghai Junshi to Pursue Covid-19 Therapies

American pharmaceutical company Eli Lilly & Co. set up a partnership with Chinese drugmaker Shanghai Junshi Biosciences Co. to jointly develop new antibody therapies for Covid-19, the disease that has sickened 3.6 million people worldwide.

The partners will collaborate in research on therapeutic antibodies that could be used to treat and prevent SARS-COV-2, the virus that causes Covid-19, Hong Kong listed Junshi said in a statement. The deal is worth as much as $330 million initially to Junshi.

As scientists race to develop treatments for Covid-19, neutralizing antibody therapies seem to be on a faster track. The approach promises to be highly effective but entails substantial risks, experts said.

A neutralizing antibody is an antibody that can recognize proteins on the surface of a virus and block it from binding with receptors on a cell. Unlike vaccines, which use antigens to induce the human body to produce antibodies, neutralizing antibody treatments are directly injected to block the binding of the virus with human cells.

“Entering into this agreement with Lilly empowers us to accelerate the clinical development of Junshi SARS-CoV-2 antibodies globally,” said Li Ning, Junshi’s chief executive officer.

Lilly will first pay Junshi $10 million, followed by as much as $245 million in subsequent installments when development reaches milestones such as obtaining regulatory approval and progressing in clinical trials. Lilly will also pay more than 10% of net sales of the products to Junshi, according to the agreement.

Lilly also agreed on a potential share placement deal in which the American company will buy $75 million of newly issued Junshi shares in Hong Kong. The transaction is pending the signing of a formal agreement.

Under the partnership, Lilly will receive an exclusive license to conduct clinical development, manufacturing and distribution of the new therapies outside the Chinese mainland, Hong Kong, Taiwan and Macau, while Junshi will maintain all rights within the region.

The companies aim to submit an Investigational New Drug application to U.S. regulators and initiate clinical studies in the U.S. in the second quarter this year, according to Junshi. The company didn’t provide a timeline for trials in China.

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While the dramatic drop of Covid-19 patients in China makes human trials more difficult in the country, testing in the U.S. will be easier to carry out because of the large number of patients.

Scientists around the globe are exploring this approach as neutralizing antibodies can specifically target a virus and be highly effective, medical experts said. However, such therapies also carry risks. Researchers have found that some antibodies may induce a cytokine storm, an excessive immune response that ravages healthy lung tissue, leading to acute respiratory distress and multi-organ failure.

Shanghai-based Junshi started studying antibody therapies for Covid-19 since the start of the year and developed multiple neutralizing antibodies. One of the most promising projects is JS016, an antibody specific to the SARS-CoV-2 surface spike protein receptor, which can block binding to the host cell. The project is jointly developed by Junshi and the Chinese Academy of Science.

JS016 has completed pre-clinical studies and is now poised to start clinical testing.

“The data generated by Junshi suggest the lead antibody may have appropriate properties to support testing its therapeutic use in patients as well as exploring its potential for preventing infection in at-risk individuals,” said Daniel Skovronsky Lilly’s chief scientific officer. “We look forward to partnering with Junshi to quickly begin testing this potential new therapy in clinical trials.”

Yao Sheng, deputy general manager of Junshi, said earlier that the company is in discussions with global regulators to push forward potential clinical trials for two of its neutralizing antibodies engineered for Covid-19.

A source close to the matter said the partnership with Lilly will help Junshi to accelerate clinical studies. It also fits into Lilly’s long-pursued strategy of improving antibody studies, the source said.

Lilly devoted just six days of due diligence research on Junshi’s production and R&D capacity and offered unusually good terms including the higher-than-usual double-digit share of sales for Junshi, the person said.

Denise Jia contributed to this story.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)