Innovent Biologics (HKG:1801) sold a license to two late-stage cancer drugs to Japan's Takeda Pharmaceutical (TYO:4502), under a deal with an upfront payment of $1.2 billion, according to a Hong Kong bourse filing Wednesday.

The license agreement covers IBI363 and IBI343, as well as an option for the early-stage IBI3001.

Under the license agreement, Innovent and Takeda will co-develop IBI363 globally and co-commercialize the drug in the U.S.

Outside the U.S., Takeda will have an exclusive right to commercialize the drug in all regions except greater China.

Similarly, Takeda will be granted exclusive rights to IBI343 in all regions except Greater China.

Meanwhile, the option for IBI3001 covers all regions outside Greater China.

The $1.2 billion upfront payment includes a $100 million investment by Takeda by way of 6,913,834 shares priced at HK$112.56 each. The stocks represent 0.40% of the company's issued shares.

Innovent is also eligible for potential milestone payments totaling up to $10.2 billion, as well as applicable royalties.

Innovent shares were up over 3% in morning trade Wednesday.