Exterior view of the entrance to Merck headquarters on February 5, 2024 in Rahway, New Jersey.
Spencer Platt | Getty Images
Merck said Wednesday 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 the drug will be tested for first. Still, it boosts the drug company's chances of capturing a share of the booming obesity drug market, which some analysts expect will be worth more than $100 billion a year by the early 2030s.
Several other drug manufacturers, including Pfizer And Rocheracing to develop more convenient obesity pills that can compete with blockbuster injections from Novo Nordisk and Eli Lilly.
Under the terms of the deal, Merck will have the exclusive global license to develop, manufacture and commercialize Hansoh Pharma's HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisk The popular weight loss drug Wegovy and diabetes treatment Ozempic similarly target GLP-1 to suppress appetite and regulate blood sugar levels.
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 on sales, according to a press release.
Merck said a pretax charge of $112 million, or 4 cents per share, will be included in its fourth-quarter results.
In the release, Dean Li, president of Merck Research Laboratories, said the oral drug “has 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 the cardiovascular outcome, if you can demonstrate the diabetes outcome, which you're starting to see data for, if you can see the benefits of fatty liver disease… . that is an area where we think there are opportunities,” he said at a conference at the time.
It is the latest transaction involving experimental GLP-1 drugs from China. AstraZeneca Last year, Chinese company Eccogene licensed the experimental oral drug, which has since been in mid-stage development.