An outside view of the entrance to Merck's headquarters on February 05, 2024 in Rahway, New Jersey.
Spencer Platt | Getty Images
Merck Chinese pharmaceutical company Hansuh Pharma said on Wednesday that it has snatched the rights to produce experimental weight-loss pills from Chinese pharmaceutical company Hansuh Pharma 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 the drug on first. Still, it boosts the drugmaker's chances of winning a slice of the booming obesity drug market, which some analysts expect to be worth more than $100 billion annually by the early 2030s.
Many other drug makers, including Pfizer and Roshis racing to develop a more convenient obesity pill that can compete with the blockbuster injections from Novo Nordisk and Eli Lilly.
Under the terms of the deal, Merck will receive the exclusive global license to develop, manufacture and market Hansoh Pharma HS-10535, an investigational oral drug that targets a gut hormone called GLP-1. Novo Nordisk Wegovy's popular weight-loss and diabetes drug Ozempic similarly targets GLP-1 to reduce appetite and regulate blood sugar.
Merck will pay Hansoh $112 million up front for the rights to the drug, with the potential for an additional $1.9 billion in milestone payments and royalties on sales. According to a press release.
Merck said the pre-tax charge of $112 million, or 4 cents per share, will be included in fourth-quarter results.
In the statement, Dean Lee, president of Merck Research Laboratories, said the oral drug “has the potential to provide additional cardiovascular benefits beyond simply weight reduction.”
Merck CEO Rob Davis said early last year that the company was seeking GLP-1 therapies with benefits beyond weight loss.
“I think everyone realizes that weight management is a difficult thing to get compensation for,” he said. “But if you can show cardiovascular outcomes, if you can show diabetes outcomes, which you're starting to see data for, and if you can see benefits for fatty liver disease… At a conference at the time: “This is an area where we think there is opportunity.”
This is the latest deal involving experimental GLP-1 drugs from China. AstraZeneca Last year, the investigational oral drug was licensed to Chinese company Eccogene, which has since moved into mid-stage development.
