Extraneous view of the entrance to Merck headquarters on February 05, 2024 in Rahway, New Jersey.
Spencer Platt | Getty Images
Merck on Wednesday estimated it has snagged the rights to an experimental weight loss pill from Chinese drugmaker Hansoh Pharma, in a deal significance up to $2 billion.
The oral drug has not yet entered human trials, and Merck did not specify which diseases it plans to check-up the drug on first. Still, it boosts the pharmaceutical company’s chances of winning a slice of the booming obesity drug merchandise, which some analysts expect to be worth more than $100 billion a year by the early 2030s.
Respective other drugmakers, including Pfizer and Roche, are racing to develop more convenient obesity pills that can contend with blockbuster injections from Novo Nordisk and Eli Lilly.
Under the terms of the deal, Merck will get to the exclusive global license to develop, manufacture and commercialize Hansoh Pharma’s HS-10535, an experimental oral drug that aims a gut hormone called GLP-1. Novo Nordisk’s popular weight loss drug Wegovy and diabetes treatment Ozempic similarly end GLP-1 to tamp down appetite and regulate blood sugar.
Merck will pay Hansoh $112 million upfront for moralities to the drug, with the potential for an additional $1.9 billion in milestone payments and royalties on sales, according to a news hand out.
Merck said a pretax charge of $112 million, or 4 cents per share, will be included in its fourth-quarter results.
In the story, Dean Li, president of Merck Research Laboratories, said the oral drug has “potential to provide additional cardiometabolic profits beyond weight reduction.”
Merck CEO Rob Davis early last year said the company was seeking GLP-1 treatments with betters beyond weight loss.
“I think everyone recognizes weight management is a hard thing to get reimbursed. But if you can show cardiovascular follow-up, if you can show diabetes outcome, which you’re starting to see data for, if you can see fatty liver disease benefits … that is an room where we think there’s opportunity,” he said at a conference at the time.
It is the latest transaction involving experimental GLP-1 cures from China. AstraZeneca last year licensed Chinese company Eccogene’s experimental oral drug, which has since excited into mid-stage development.