Merck (MRK.N) on Wednesday signed a deal worth up to $2 billion with Hansoh Pharma (3692.HK) to develop and sell the Chinese biotech's experimental oral obesity drug that works similar to the popular weight-loss treatments Wegovy and Zepbound.
Merck said it will pay $112 million upfront for an exclusive license to the drug known as HS-10535. Under the deal, Hansoh will be eligible to receive up to $1.9 billion in development and regulatory milestone payments as well as royalties on sales.
While market leading treatments Novo Nordisk's (NOVOb.CO) Wegovy and Eli Lilly's (LLY.N) Zepbound, known as GLP-1 drugs, are both injectables, Hansoh's drug can be taken orally.
Drugmakers such as Amgen (AMGN.O), Structure Therapeutics (GPCR.O) and Viking (VKTX.O), as well as Novo and Lilly are also developing oral weight-loss treatments in the hopes of providing patients with a convenient dosing option.
Hansoh's drug is currently in preclinical stage of testing, which is typically conducted on animals. It is several years away from being commercially launched.
"Through this agreement, we aim to build on our experience targeting incretin biology to evaluate HS-10535 and its potential to provide additional cardiometabolic benefits beyond weight reduction," said Merck Research Laboratories president Dean Li.
Merck is developing its own GLP-1 candidate, efinopegdutide, for a type of serious fatty liver disease known as metabolic dysfunction-associated steatohepatitis (MASH). Shares of the U.S. drugmaker rose about 2% to $101.75 in premarket trading.
GLP-1 drugs help slow digestion and reduce hunger by triggering a feeling of fullness. Some analysts expect the market for these weight-loss treatments to reach the $150 billion mark in the early 2030s.
