Pfizer Inc reached a deal with a unit of China’s Shanghai Fosun Pharmaceutical Group Co to co-develop a weight loss drug, as the American pharma giant doubles down on its obesity drug bets.

The agreement with Fosun’s YaoPharma is for the development, manufacturing and commercialization of YP05002, a small molecule glucagon-like peptide 1 — or GLP-1 — receptor agonist currently in phase 1 development for chronic weight management, according to a company statement.

Fosun Pharma’s shares surged as much as 6.8 percent in Hong Kong Special Administrative Region on Wednesday morning, marking their strongest rally since September.

Pfizer had been trying to develop its own weight-loss drugs, but has faced setbacks. It was forced to abandon two pills it was developing after patients experienced bad side effects in trials. In November, it bought obesity startup Metsera Inc for $10 billion after a high-stakes bidding war with Novo Nordisk A/S.

“Recent news flow reignited market buzz around oral obesity drugs,” Bloomberg Intelligence analyst Pan Liu said, referring to both Pfizer’s partnership with YaoPharma around its oral GLP-1 drug and Ascletis Pharma Inc. posting promising early results comparable with Eli Lilly & Co’s orforglipron.

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Under the deal, YaoPharma will complete an ongoing YP05002 phase 1 clinical trial and grants Pfizer an exclusive license to further develop, manufacture and commercialize YP05002 worldwide.

YaoPharma will receive an upfront payment of $150 million and is eligible to receive milestone payments up to $1.94 billion, as well as tiered royalties on sales, if approved.

Shares of Ascletis Pharma Inc rallied Tuesday after mid-stage results for its oral weight-loss drug suggested a potential best-in-class profile.