Achieved a blockbuster deal worth 2.75 billion US dollars, highlighting the long-term value of INSILICO (03696) configuration.

In the past two years, global multinational pharmaceutical companies have started a "shopping spree" mode in the field of AI pharmaceuticals. During this period, research and development cooperation/BD (business development) transactions related to AI pharmaceuticals have shown a trend of "double increase in quality". The number of transactions within the year has increased from 84 to 114, and the average transaction amount has increased by more than 170%, reaching 380 million US dollars. Against this backdrop, INSILICO (03696) announced a BD cooperation with Eli Lilly worth nearly 3 billion US dollars, making this "Hong Kong-listed AI pharmaceutical first stock" once again the focus of attention in the industry and the market. On March 30, the AI pharmaceutical leading listed company INSILICO announced in a statement that it has reached a heavy cooperation with Eli Lilly, a global multinational pharmaceutical giant, in external authorization and global research and development, with an initial payment of 115 million US dollars and a total price of up to 2.75 billion US dollars. In addition to announcing the cooperation with Eli Lilly, INSILICO also disclosed its first annual performance after listing. In 2025, the company upgraded the three major areas of biomedicine, chemistry, and scientific research under Pharma.AI, nominated 6 pre-clinical candidate drugs throughout the year, facilitated progress in 8 projects towards clinical trials, and added more than 10 BD partnerships within the year, with a total transaction value of 1.3 billion US dollars. Based on the strong business performance of the company after its listing, many investment institutions have raised or maintained high target prices for INSILICO. Including well-known domestic and foreign investment banks such as Morgan Stanley, CITIC SEC, and GF SEC, they have given INSILICO positive ratings such as "hold" and "buy" in their updated research reports, raising the company's target stock price to the range of 70-85 Hong Kong dollars, with the highest increase exceeding 40%. Against the backdrop of major banks being bullish and raising target prices, INSILICO was undervalued due to market volatility, creating a highly cost-effective pricing anchor for the investors. Strong performance in the secondary market, intensive BD realizing value Recently, under the influence of external factors and weak liquidity, the market funds have undergone a structural shift in their aesthetic preferences, with investors more willing to pay a premium for clear value realization. From the recent performance in the secondary market, on March 27, the Hong Kong biotechnology sector saw a collective explosion, driving the Hang Seng Healthcare Index to a single-day increase of 4.85%. This round of surge is not driven by short-term emotions but by the long-term accumulation of research and development achievements in the industry, combined with the concentrated release of positive BD and product sales performance. It can be observed that companies within the sector have successively disclosed their 2025 annual reports. Hithink RoyalFlush Information Network's iFind data shows that the median revenue growth rate of companies in the Hong Kong biotechnology sector that have disclosed their financial reports is 15.33%, and the median net profit growth rate is 29.81%. The industry's robust growth data indicates that the domestic biotechnology industry is moving from the "investment stage" to the "harvesting stage". Under this logic, the secondary market has begun to speculate early on some heavy-weight targets with high performance certainty and profit expectations, and INSILICO is one of them. On March 27, INSILICO's stock price rose steadily from the opening and eventually closed up significantly by 13.72%, significantly outperforming the index. Unlike the logic of investors in the sector playing with other targets, INSILICO, as a stock that went public at the end of last year, investors actually have clear expectations for its 2025 performance, which has already been reflected in the company's stock price, which doubled earlier in the year. From an investment perspective, INSILICO's price surge on March 27 was an early "bet" on the company's anticipated revenue growth and profit expectations for 2026. It is understood that at the beginning of 2026, within a month, INSILICO crossed the three major golden racetracks of cancer, neurology, and metabolism, and reached heavy cooperation agreements with five domestic and foreign pharmaceutical companies, including SchiMiers, Hematec Biology incubated by Shanghai Fosun Pharmaceutical, Qilu Pharmaceutical, CMS, and Yuanyi Biology, with a total cooperation amount exceeding 9 billion Hong Kong dollars. By 2026, the pace of INSILICO's heavy BD collaborations has clearly accelerated, further validating its ability to continue to consolidate its unique and scarce position in the global AI pharmaceutical field with its strong AI platform capabilities, and achieve phased and sustained innovative research and development gains in a wide range of BD transactions. It is worth noting that the first payment transactions concluded by INSILICO with SchiMiers and Hematec Biology alone have reached approximately 329 million Hong Kong dollars, equivalent to about 42 million US dollars. At the same time, the milestone payments triggered by the previous collaborations in multiple fields and types, such as drug research and development or external licensing cooperation with partners such as Menarini and Taijing, involving clinical trial initiation doses or PCC nominations, amounted to tens of millions of US dollars. It is evident that INSILICOs BD collaboration pace is accelerating, and the high initial payments and subsequent high milestone payments made by collaborating companies can effectively supplement the company's cash flow, accelerate profit expectations, and bring long-term benefits to INSILICO in international BD transactions and AI pharmaceutical research and development fields. Further bolstered by the strong endorsement of the collaboration with Eli Lilly, INSILICO once again demonstrated its robust value realization capability, the continuity of overall income, and strong profit expectations, showing a long-term investment value that clearly aligns with the current sentiment of the secondary market and is worth investors' long-term attention. Core values receive top endorsements, and long-term investment value shines In recent years, many multinational pharmaceutical companies are facing a double anxiety of a patent cliff and reliance on a single species, and Eli Lilly, as a Big Pharma, can also feel the pressure from within the industry. Against this backdrop, AI pharmaceuticals have become its breakthrough point for crossing the value cycle. Incomplete statistics show that Eli Lilly alone engaged in ten external collaborations in the field of AI pharmaceuticals in 2025, involving funds exceeding 3 billion US dollars. It is noted that in terms of top-level computing power and algorithmic architecture, Eli Lilly chose NVIDIA. The two parties reached a strategic cooperation worth 1 billion US dollars in January of this year; and in terms of AI platform cooperation, Eli Lilly chose INSILICO. Compared to the previous "one-off deals" in the field of AI pharmaceutical collaborations, the long-term cooperation between Eli Lilly and INSILICO can be seen as a continuous evolution from tool provision to symbiotic capital. As early as 2023, Eli Lilly and INSILICO preliminarily reached a software collaboration for the Pharma.AI platform; in November 2025, the two parties announced the start of a drug development strategic cooperation, conducting candidate compound generation, design, and optimization in the innovative target field, with a potential total value of over 1 billion US dollars; at the end of 2025, Eli Lilly participated in INSILICO's Hong Kong IPO as a cornerstone investor, marking Lilly's first participation as an anchor investor in a biopharmaceutical enterprise; and then the heavy cooperation worth 2.75 billion US dollars was announced by the two parties. It can be seen that in the three-year-long cooperation, Eli Lilly and INSILICO have completed a deep binding of "capital + business", and the close to 2.75 billion US dollars from this cooperation with Eli Lilly is close to the total amount of Eli Lilly's external investment in AI pharmaceuticals in the previous year, indicating that the strategic partnership between the two companies has evolved towards becoming a "global core research partner". The reason why Eli Lilly values the cooperation with INSILICO may lie in the fact that the AI pharmaceutical platform value of INSILICO has been firmly validated. From the pipeline information disclosed by INSILICO, the core variety Rentosertib (ISM001-055) used to treat IPF is one of the fastest progressing AI-driven drugs globally, taking only 18 months from discovery of the target to entering clinical trials. Traditionally, pharmaceutical companies take an average of 4.5 years to go the same route. The drug has previously been recognized by the National Medical Products Administration as a "breakthrough therapy" and has completed efficacy validation in phase IIa clinical trials, expected to be the worlds first AI drug to enter phase III clinical trials in 2026. Through three years of long-term cooperation, Eli Lilly has clearly gained an in-depth understanding of INSILICO's ability to explore new drug mechanisms through its AI engine. This is why it chose to further cooperate with INSILICO to accelerate the identification of promising candidate drugs. For INSILICO, the high initial payments made by Eli Lilly in this cooperation not only bring immediate benefits but also have an immediate positive impact on INSILICO. In this cooperation, the initial payment made by Eli Lilly will bring INSILICO 115 million US dollars in cash, which is nearly twice the company's full-year revenue for 2025, providing a strong impetus for the company's continuous cash flow generation of 363 million US dollars since its IPO. Combining the BD cooperation and the initial payment amount in January of this year, it means that the company will have over 150 million US dollars in confirmed revenue in the short term, which will be reflected in INSILICO's subsequent financial reports. In addition, according to the 2025 annual financial report disclosure, INSILICO's research and development expenses decreased by approximately 10.52 million US dollars to 81.379 million US dollars during the reporting period, mainly due to the reduction in third-party CRO costs. From an analysis of the company's business layout, this trend is not only due to refined expense management but also due to INSILICOs internal validation capabilities in the automated wet laboratory. In terms of BD, the rapid expansion of new collaborations and the stable delivery of existing collaborations constitute the revenue pillar; in terms of proprietary capabilities, the AI platform has formed a closed loop and truly created multidimensional value. Under the multiple positive effects, the expectation of INSILICO achieving positive profitability for the first time may be realized in advance. This is an important reason for the recent significant rise in the company's stock price. Conclusion In summary, since the beginning of 2026, within a short period of a few months, INSILICO has reached multiple heavy collaborations with many domestic and foreign companies, expecting an initial payment to confirm revenue of 150 million US dollars, demonstrating the company's historical performance in the continuity of innovative realizations and the growth certainty of its own value. In the current market environment where investors are more willing to pay a premium for clear value realization, having a heavy collaboration endorsement from the top industry giant Eli Lilly is expected to significantly boost INSILICO's future stock price, enhancing the investment willingness and confidence of Hong Kong investors, significantly shortening the capital circulation cycle for investors, and laying a solid foundation for continued long-term holding of INSILICO.