The $11.4 billion BD transaction validates the global innovation and commercialization potential, with INNOVENT BIO's (01801) valuation expected to increase.

On October 22, the stock price of INNOVENT BIO (01801) opened nearly 10% higher and reached a high of 95.5 Hong Kong dollars in the morning. The trading volume in the morning exceeded 40 million shares, with a turnover of over 4 billion Hong Kong dollars. The high market sentiment behind the trading frenzy was fueled by a heavyweight announcement released by the company before the opening. INNOVENT BIO announced a BD transaction with Takeda Pharmaceutical worth a total of $11.4 billion, characterized by "high upfront payment, high milestone payments, and high profit sharing." In this strategic collaboration, INNOVENT BIO and Takeda Pharmaceutical will jointly develop a new generation IO cornerstone therapy, IBI363 (PD-1/IL-2-bias), globally, and commercialize it in the United States. Additionally, INNOVENT BIO will grant Takeda Pharmaceutical the global commercialization rights to IBI363 and IBI343, along with exclusive rights to a early-stage project IBI3001 in specific regions globally. According to the agreement, INNOVENT BIO will receive a $1.2 billion upfront payment (including $100 million in premium strategic equity investment) and potential milestone payments. INNOVENT BIO will also receive a high percentage of sales profits, potentially reaching double digits, with profits from the joint commercialization of IBI363 in the US split at a 40/60 ratio. It is worth noting that for the focus product of this strategic collaboration, IBI363, the two parties will adopt a shared development and profit-sharing model in the US market. This signifies not only a new record for domestic pharmaceutical companies in foreign cooperation but also marks the first time a domestic pipeline has jointly ventured into the global market with a multinational giant in an effort to make an impact in the billion-dollar oncology market. A powerful partnership for global collaboration Different from previous BD transactions, the collaboration between INNOVENT BIO and Takeda in terms of the transaction content and partnership format presents a new model for cooperation between domestic innovative drug companies and multinational pharmaceutical companies. First, in terms of the transaction content, the two parties did not focus on a single flagship product but instead conducted a "basket-packaged authorization" around the currently popular IO and ADC two major frontiers. This indirectly demonstrates Takeda Pharmaceutical's high recognition of INNOVENT BIO's overall technology platform and long-term investment. Secondly, in terms of the transaction model, according to the collaboration agreement, for the core product IBI363, the two parties will share development and profit losses in the US market. Typically, while this model involves relatively complex transaction framework design, after the initial contract, the two parties often generate more "supplementary agreements" due to the complexity, to refine the roles and actual decision-making of the two parties in the areas of product development, production, and commercialization. This subsequently evolves into a "configurable, evolvable" collaborating system in layers, which, in practice, is a more practical and successful cooperation model. Lastly, according to the agreement, Takeda Pharmaceutical will also invest $100 million in premium and subscribe to company equity at a 20% premium, becoming a key strategic shareholder of INNOVENT BIO. Through the bundling of "capital + commerce," the strategic relationship between the two parties is expected to further evolve into a "global community of shared operating interests," beneficial for the long-term stability of their cooperation. Opening a new era of international commercialization For the collaboration between INNOVENT BIO and Takeda Pharmaceutical, the global development and commercialization of the focus product IBI363 is undoubtedly the "main event." Its potential value has already been partially validated by significant clinical results, with its treatment and global commercialization potential possessing significant ongoing exploration of immense value. As a global top 15 pharmaceutical company, Takeda has faced challenges in the oncology field in recent years due to "adequate layout, lacking heavyweights." Its solid tumor pipeline has been forced to adjust due to several projects not meeting expectations. As the focus of this collaboration, IBI363 precisely fits into Takeda's upgraded track for oncology layout. IBI363 is a globally pioneering bispecific antibody fusion protein developed independently by INNOVENT BIO. Its core innovation lies in its ability to simultaneously block the PD-1/PD-L1 pathway and activate the IL-2 pathway, achieving dual immune activation. What is even more unique is that its PD-1 binding arm not only blocks the PD-1 checkpoint but also selectively delivers IL-2 to tumor-specific T cells co-expressing PD-1 and IL-2, achieving precise activation and amplification of the "elite forces" against cancer. Data presented at this year's ASCO Annual Meeting showed that IBI363 demonstrated good clinical activity in immunotherapy-resistant lung cancer, melanoma, mucosal melanoma, and microsatellite stable colorectal cancer. This indicates that it can not only cover the $50 billion PD-1 base of lung and colon cancers but also has the potential to address the core pain points of current PD-1-resistant treatments. Furthermore, IBI363's antitumor activity is not influenced by PD-L1 expression levels. This means that it may also be effective for "cold tumors" with low or no PD-L1 expression, such as pancreatic cancer and liver cancer, addressing a major pain point in current immunotherapy. From Takeda Pharmaceutical's perspective, these highlights are all strong points for IBI363. From the details of this "high upfront payment, high milestone payments, high profit-sharing" BD transaction, investors can easily see Takeda Pharmaceutical's determined attitude and confidence in the overseas drug nature and future sales of the product. For INNOVENT BIO, the potential injection of up to $11.4 billion through this collaboration undoubtedly provides substantial financial support for the company's large-scale global clinical trials in the future. Collaborating with Takeda on joint research will also help advance heavy products like IBI363 through the clinical stage smoothly, reducing pipeline development risks and shortening development cycles. At the same time, leveraging Takeda's global network in registration, clinical development, and commercialization can also help INNOVENT's innovative products quickly access mainstream markets in Europe and the US, paving the way for the successful landing of future pipeline products. Additionally, this collaboration with Takeda also shows the international peers' high recognition of INNOVENT's value in independent innovative technology platforms. With Takeda Pharmaceutical's investment endorsement, the company's stock price is expected to be boosted, shortening investors' capital recycling cycle, enhancing investors' investment willingness and confidence, and laying a solid foundation for continued long-term holding of INNOVENT BIO.