Pfizer Inc. and China’s Innovent Biologics Inc. signed a global agreement worth as much as $10.5 billion to develop cancer drugs, highlighting surging demand for Chinese drugs despite the geopolitical pressures hanging over the biotech sector.

The agreement includes a $650 million upfront payment and up to $9.85 billion in potential milestones, according to the companies’ announcement. Innovent’s shares climbed as much as 10% in Hong Kong.

The collaboration spans a portfolio of 12 oncology programs, comprising eight Innovent-originated early-stage assets and four Pfizer-proposed discovery programs, Pfizer said in a statement.

“By combining Innovent’s discovery and early clinical development with Pfizer’s global research and development and commercialization capabilities, we have an opportunity not only to strengthen our pipeline, but to accelerate the delivery of breakthroughs that can redefine standards of care,” Jeff Legos, Pfizer’s chief oncology officer, said in the statement.

China’s biotech sector is booming, but its growth has coincided with backlash from the U.S. Earlier in May, John Moolenaar, chairman of the House Select Committee on China called on the Treasury Secretary to restrict biotech licensing deals, arguing American capital was fueling China’s “rapid ascent up the pharmaceutical value chain.”

Still, the concerns have done little to stymie deals. Earlier this month, Bristol-Myers Squibb Co. inked a collaboration and licensing deal with Jiangsu Hengrui Pharmaceuticals Co. that could be valued at as much as $15.2 billion. In the first quarter, Chinese firms struck overseas licensing deals worth more than $60 billion.

Pfizer has been working to cut costs while building a pipeline that can propel its next era of growth. Many of the company’s top drugs are under pressure due to competition and the loss of patents. That’s sent Chief Executive Officer Albert Bourla hunting for deals to help Pfizer find its next blockbuster medicines. 

The company spent $10 billion to buy obesity startup Metsera Inc. after a heated bidding war with Novo Nordisk A/S in 2025. Pfizer signed another commercialization deal with Chinese company Hangzhou Sciwind Biosciences Co. earlier in 2026 for an obesity therapy called ecnoglutide, further strengthening its push into the fast-growing weight-loss market. 

Cancer also has been a key area for Pfizer. In 2023, the company spent $43 billion on the acquisition of cancer-drug maker Seagen Inc., and it paid $1.25 billion upfront for 3SBio Inc’s cancer treatment.

Innovent has built a reputation developing cancer drugs like Tyvyt, a PD-1 inhibitor that’s been approved in China to treat eight different types of cancer. The company also received approval in China last year for an obesity drug called mazdutide that rivals popular shots made by Eli Lilly & Co. and Novo.

Innovent also has a long-standing relationship with Lilly. In February, the companies announced a strategic collaboration to advance new medicines in oncology and immunology. 

Under the terms of that agreement, Innovent would receive a $350 million upfront payment and is eligible to receive development, regulatory and commercial milestone payments totaling up to  $8.5 billion, contingent upon the achievement of certain future events, the company said.

Innovent has also signed licensing agreements with Roche Holding AG and Takeda Pharmaceutical Co.