To strengthen its leading position in the rapidly growing obesity treatment market, U.S. pharmaceutical giant Eli Lilly (LLY.US) has announced plans to invest approximately $3 billion in China over the next decade. The investment will focus on expanding local manufacturing capacity, with a strategic emphasis on the weight-loss drug sector. In a statement released on Wednesday, Lilly indicated that the funds will be primarily directed toward establishing a local production line for its weight-loss drug candidate, orforglipron, which is currently under regulatory review in China.
To supplement its own production capabilities, Lilly intends to collaborate with local partners. For example, the company has entered into a $20 million agreement with Pharmaron Beijing Co., Ltd. to jointly develop technical capabilities for manufacturing this drug and other future therapies. Following the announcement, shares of Pharmaron’s Hong Kong-listed entity surged by as much as 13% on Thursday, marking their largest single-day gain since late July. At the time of writing, Pharmaron’s Hong Kong stock was up 8.28%, while Lilly’s U.S. shares edged down 0.52% in after-hours trading.
Eli Lilly is among several multinational pharmaceutical companies seeking to leverage China’s increasingly sophisticated drug research and development infrastructure, manufacturing capabilities, and large patient population. The company noted that its cumulative investment in China has now reached nearly $6 billion. Its competitor, AstraZeneca (AZN.US), has also pledged to invest $15 billion in the country by 2030.
Since the beginning of 2024, Lilly has established innovation incubators in Beijing and Shanghai and expanded its manufacturing facility in Suzhou to produce its blockbuster weight-loss injection Mounjaro (tirzepatide). More recently, the company entered into a collaboration with Innovent Biologics Inc to explore new therapeutic approaches.
In China, Lilly’s Mounjaro is currently approved for both diabetes and weight-loss treatment, placing it in competition with Novo Nordisk (NVO.US) and local firms such as Innovent. With the patent for the active ingredient in Novo Nordisk’s key drugs Ozempic and Wegovy set to expire this year, the product line may face competition from lower-cost generic versions in the future.
According to data provided by Lilly, China is home to approximately 148 million people with type 2 diabetes and more than 500 million individuals who are overweight or obese.
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