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US drugmaker Eli Lilly will sign a $2bn deal with a Hong Kong-listed company that uses artificial intelligence for drug discovery, according to sources familiar with the matter, highlighting the global pharmaceutical sector’s increasing reliance on medicines developed in China.
Indianapolis-based Lilly will acquire exclusive rights to sell a GLP-1 drug for diabetes from Insilico Medicine, a biotech that went public on the Hong Kong stock exchange in December. Eli Lilly’s Asian venture arm is one of Insilico’s 10 largest shareholders.
The deal, which is expected to be announced later on Sunday, includes a $115mn upfront payment and could total more than $2bn if future regulatory and sales milestones are hit, sources said.
Lilly and Insilico declined to comment. Additional details about the deal could not immediately be learned.
Lilly, like its rivals in the global pharmaceutical sector, is aggressively hunting in China for new drugs.
A record number of pharmaceutical companies from outside China licensed drugs made by Chinese businesses in 2025, totalling $5.6bn in upfront payments, according to data from Evaluate, a data provider.
In February, Lilly signed a licensing agreement for cancer and immune drugs with Chinese pharmaceutical company Innovent Biologics that included a $350mn upfront payment and an $8bn potential deal value. Lilly’s Asian venture arm also invested in March in Shanghai-based biotech start-up Excalipoint.
AstraZeneca in January signed a licensing deal worth up to $4.7bn with Chinese group CSPC Pharmaceuticals to develop weight-loss and diabetes drugs.
Lilly’s deal also casts a spotlight on the pharmaceutical sector’s interest in AI for drug development. In November, Lilly announced a $345mn deal with a subsidiary of XtalPi, a Shanghai-based biotech. The deal gives Lilly access to the company’s AI platform.
Speaking at a conference in March, Lilly chief financial officer Lucas Montarce said the company “[is] investing heavily” in AI for research and development. “But it will take more time” to get AI drugs from a research phase to clinical testing, he said.
In its annual report in February, Lilly added new language warning that “there are significant risks involved in developing and deploying AI”. The company said it cannot assure its investments in AI will be effective or profitable.
Additionally, “AI may enable new competitors in drug discovery and enhance the capabilities of existing competitors, thereby broadening and intensifying competitive dynamics”, Lilly said.
Lilly’s diabetes drug Mounjaro was the world’s second-biggest by sales in 2025. Sales of Lilly’s diabetes and obesity drugs surged last year, propelling the company’s market capitalisation to $1tn.
But Lilly’s shares have pared gains this year and its stock is down 17 per cent so far in 2026. Lilly is facing new competition from Novo, which launched its first pill for weight loss earlier this year.
Founded in 2014 at Johns Hopkins University in Baltimore, Insilico was an early leader in developing drugs with artificial intelligence before OpenAI and Anthropic ignited a frenzy for AI technology.
Insilico disclosed in December it is unprofitable, but sees licensing deals as a key source of revenue.