China-based Yabao will co-develop Lilly’s sodium-glucose linked transporter inhibitor (SGLT1) molecule.
Under the deal, Yabao secures the rights to develop and commercialize the SGLT1 compound in China, while Lilly retains rights in all other markets.
The companies will collaborate to identify a development plan for China. Yabao will initially be responsible to carry out and fund all development.
Lilly however retains future buy-in options for China. The company’s SGLT1 inhibitor program has completed a Phase I study in Singapore, apart from pre-clinical development.
Last year, the companies unveiled the co-development of Lilly’s glucokinase activator (GKA), LY2608204.
Yabao Pharmaceutical president of R&D Peng Wang said: "Lilly’s SGLT1 Inhibitor program is based on a mechanistic understanding and chemistry approach that has the potential to enable the development of a best-in-class agent.
"Yabao is again pleased to be collaborating with Lilly, a global leader in diabetes, on our second strategic collaboration, which demonstrates our joint commitment to diabetes patients in China."
Yabao is undertaking development of new pharmaceuticals apart from its business in modern traditional Chinese medicines and chemical generics.