Dec 18 (Reuters) – Merck (MRK.N) has signed a licensing agreement worth up to $2 billion with Chinese biotech company Hansoh Pharma (3692.HK) for an experimental oral drug aimed at treating obesity. The deal positions Merck as a late player in the race to offer a weight-loss pill to compete with injectable treatments currently dominating the market.
The U.S. pharmaceutical giant will take on the development, manufacturing, and potential sales of the drug, named HS-10535. This drug is a GLP-1 receptor agonist, similar to injectable weight-loss drugs from competitors Novo Nordisk (NOVOb.CO) and Eli Lilly (LLY.N).
“We see Merck’s timing as a challenge,” said Courtney Breen, an analyst at Bernstein, noting that HS-10535 is likely to lag behind other contenders, such as Lilly’s weight-loss pill, orforglipron.
Other companies, including Amgen (AMGN.O), Pfizer (PFE.N), Structure Therapeutics (GPCR.O), and Viking (VKTX.O), are also developing oral obesity treatments in hopes of offering a more convenient alternative to injections.
AstraZeneca (AZN.L) has also partnered with China’s Eccogene for a similar experimental weight-loss pill.
Currently, Hansoh’s oral drug is in the preclinical testing phase, meaning it is still being evaluated in animal studies. As a result, it could take several years before it reaches the market.
Merck plans to assess the drug’s potential to offer additional cardiometabolic benefits beyond weight loss, according to Dean Li, president of Merck Research Laboratories.
The agreement includes an upfront payment of $112 million to Hansoh for exclusive rights to HS-10535. Hansoh could receive up to $1.9 billion in milestone payments as the drug progresses through development, along with royalties on future sales. Following the announcement, Merck’s stock saw a slight increase, reaching $100.80 in premarket trading.
Merck has previously stated its focus on developing second- and third-generation weight-loss treatments, including oral versions and drugs with the potential to address obesity-related conditions.
In addition to the Hansoh partnership, Merck is working on its own GLP-1 candidate, efinopegdutide, aimed at treating metabolic dysfunction-associated steatohepatitis, a serious form of fatty liver disease.
