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AstraZeneca has agreed a licensing deal worth up to $4.7bn with Chinese group CSPC Pharmaceuticals to develop weight loss and diabetes drugs, as it seeks to expand into the fast-growing market.

The UK-listed drugmaker said it will pay $1.2bn up front and potentially another $3.5bn if regulatory and development milestones are met. The deal gives it access to SYH2082, CSPC’s once-monthly injectable drug candidate that is about to enter early-stage clinical trials, as well as three other weight-management drug candidates.

AstraZeneca will own the global rights for the drugs except for China, Taiwan, Hong Kong and Macau.

The deal is a boost for AstraZeneca’s obesity pipeline where it has three treatments in various stages of development. The pharma group is confident it can compete in a market currently dominated by Novo Nordisk and Eli Lilly that analysts predict could be worth $100bn by 2030.

Participating in AstraZenecaone of the UK’s most valuable listed companies, was flat in morning trading on Friday following the news.

Sharon Barr, AstraZeneca’s head of biopharmaceuticals research and development, said the agreement, which expands an existing partnership, will advance AstraZeneca’s “weight management portfolio by delivering new properties that complement” its programs.

Major pharmaceutical companies are allocating more of their investment budget to China.

In 2023, AstraZeneca will license a weight loss pill from China’s Eccogene. Under that agreement, Eccogene received an initial payment of $185 million, with an additional $1.8bn upon reaching certain milestones. Analysts say the huge increase in overseas interest means that over the past two years, Chinese biotechs have been able to command higher prices for their products and plow money into their pipelines to develop new drugs.

AstraZeneca is increasing its investment in China, its second largest market through sales, building supply chains of local manufacturing, agreeing deals with local companies and setting up a new research and development facility in Beijing.

On Thursday, it announced plans to invest $15bn in China by 2030. The figure includes some current commitments but still signals a substantial long-term bet on the country.

AstraZeneca is increasing its engagement in China after its previous employer in China Leon Wang was arrested in late 2024 due to an investigation into the country’s illegal drug trade.