Eli Lilly has linked up with Yabao Pharmaceutical Co to develop and sell one of the US major’s early-stage diabetes drugs in China.

The drug in question is a glucokinase activator (GKA), codenamed LY2608204, which has completed Phase I studies in the USA following “extensive pre-clinical development”. GKAs have the potential to differentiate from other anti-diabetic agents by promoting insulin secretion and decreasing glucose production by the liver. As a result, Yabao says these drugs may “exert powerful anti-hyperglycaemic effects, even in patients who are relatively unresponsive to other oral drugs”.

Under the terms of the agreement, the financial terms fro which have not been disclosed, Yabao receives rights to develop and commercialise the GKA in China and the partners will collaborate “to determine a strategic development plan”. The Shanxi-based group will initially perform and fund all development, with Lilly having future buy-in options for China.

Peng Wang, head of R&D at Yabao, said that Lilly's GKA has the “potential to be best-in-class”. He added that the company brings “strong clinical and regulatory capabilities” to this “ground-breaking partnership”.

Yabao, founded in 1978, has 13 subsidiaries with more than 6,000 employees. It is now looking at innovative pharmaceuticals in addition to its well-established business in modern traditional Chinese medicines and generics.