Eli Lilly will sign a $2 billion deal with Insilico Medicine, a Hong Kong-listed AI drug discovery company, according to sources familiar with the matter. The US pharmaceutical giant will acquire exclusive rights to sell a GLP-1 diabetes drug developed using artificial intelligence. Lilly's Asian venture arm is among Insilico's 10 largest shareholders.

The agreement includes a $115 million upfront payment and could reach $2 billion if future regulatory and sales milestones are achieved. This deal highlights Big Pharma's growing reliance on Chinese-developed medicines and AI-driven drug discovery platforms. Lilly joins other major pharmaceutical companies aggressively pursuing licensing agreements with Chinese biotech firms, with 2025 seeing record upfront payments totaling $5.6 billion.

This transaction comes as Eli Lilly faces increased competition in the diabetes and obesity drug market, where its Mounjaro generated $1 trillion in market capitalization last year. The company's stock has declined 17% in 2026 amid new competition from Novo Nordisk. While Lilly invests heavily in AI for research and development, the company acknowledges significant risks in deploying the technology, warning that AI could enable new competitors and intensify competitive dynamics in drug discovery.