Merck signs licensing agreement for weight loss pills with Hansoh Pharma

Merck announced Wednesday that it has secured the rights to an experimental weight-loss pill from Chinese drugmaker Hansoh Pharma in a deal worth up to $2 billion.

The oral drug has not yet been tested in humans, and Merck has not specified which diseases it plans to test the drug on first. Still, it increases the drug company’s chances of capturing a slice of the booming obesity drug market, which some analysts expect to be worth more than $100 billion a year by the early 2030s.

Several other drug manufacturers including Pfizer And Rocheare seeking to develop more practical obesity pills that can compete with the blockbuster injections from Novo Nordisk and Eli Lilly.

Under the agreement, Merck will receive the exclusive worldwide license to develop, manufacture and commercialize Hansoh Pharma’s HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisks The popular weight loss drug Wegovy and the diabetes drug Ozempic also target GLP-1 to suppress appetite and regulate blood sugar.

Merck will pay Hansoh $112 million upfront for the rights to the drug, with the potential for an additional $1.9 billion in milestone payments and 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.

In the press release, Dean Li, president of Merck Research Laboratories, said the oral drug “has the potential to provide additional cardiometabolic benefits beyond weight reduction.”

Merck CEO Rob Davis said early last year that the company was looking for GLP-1 treatments with benefits beyond weight loss.

“I think everyone recognizes that weight management is difficult to reimburse. But if you can demonstrate cardiovascular outcomes, if you can demonstrate diabetes outcomes, which you’re starting to see data for, if you can see benefits in fatty liver disease…” “That’s an area where we think there’s opportunity,” he said at the time at a conference.

This is the latest transaction involving experimental GLP-1 drugs from China. AstraZeneca Last year, Chinese company Eccogene licensed its experimental oral drug, which is now in mid-stage development.