Exterior view of the entrance to Merck’s headquarters in Rahway, New Jersey, on February 5, 2024.
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Merck On Wednesday, the company said it had acquired the rights to an experimental weight loss drug from Chinese drugmaker Hansoh Pharmaceuticals in a deal worth up to $2 billion.
The oral drug has not yet entered human trials, and Merck has not specified which diseases it plans to test it for first. Still, it increases the drug company’s chances of grabbing a piece of the booming obesity drug market, which some analysts predict will be worth more than $100 billion a year by the early 2030s.
Several other drugmakers, including Pfizer and Rocheare racing to develop more convenient weight-loss drugs that could compete with blockbuster shots from Novo Nordisk and Eli Lilly and Company.
Under the terms of the deal, Merck will receive an exclusive global license to develop, manufacture and commercialize Hansoh Pharmaceuticals’ HS-10535, an experimental oral medicine that targets a gut hormone called GLP-1. Novo Nordisk Popular weight loss drug Wegovy and diabetes treatment Ozempic similarly target GLP-1 to suppress appetite and regulate blood sugar.
Merck will pay Hausen $112 million upfront for the rights to the drug, with the possibility of an additional $1.9 billion in milestone payments and sales royalties. according to a press release.
Merck said its fourth-quarter results will include a pretax charge of $112 million, or 4 cents per share.
Dean Li, president of Merck Research Laboratories, said in a press release that the oral drug “has the potential to provide additional cardiometabolic benefits beyond weight loss.”
Merck CEO Rob Davis said early last year that the company was pursuing GLP-1 treatments with benefits beyond weight loss.
“I think everyone realizes that weight management is a very difficult thing to get reimbursed for. But if you can show cardiovascular results, if you can show diabetes results (which you’re starting to see data on), if you can see Benefits in fatty liver disease… we think this is an area of opportunity,” he told a conference at the time.
This is the latest deal involving China’s experimental GLP-1 drug. AstraZeneca Last year, Chinese company Eccogene was licensed for its experimental oral drug, which is now in mid-stage development.
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