Dive Brief:
- Merck & Co. has made its first big move in obesity treatment, announcing Wednesday it is paying Hansoh Pharma $112 million for rights outside China to a preclinical pill that works similarly to the popular injection Wegovy.
- Per deal terms, China-based Hansoh could receive up to $1.9 billion in additional payouts based on reaching clinical, regulatory and commercial milestones. Hansoh has an option to co-promote or solely commercialize the pill, code-named HS-10535, in China.
- Merck was one of the few big U.S. drugmakers that didn’t have an experimental obesity drug in development, and investors were therefore closely watching whether it would make a deal. Choosing a relatively inexpensive licensing deal with Hansoh disappointed investors in Viking Therapeutics, Terns Pharmaceuticals and Structure Therapeutics, which have been seen as acquisition targets. Shares in all three fell Wednesday.
Dive Insight:
Although Merck is an active developer of cardiovascular drugs, it hasn’t advanced a novel metabolic medicine since its diabetes pill Januvia, which was approved in 2006. Januvia, and the metformin combination drug it calls Janumet, is still a blockbuster product, but sales have declined because of pricing pressure in the U.S. and generic competition overseas.
With billions of dollars in revenue coming in from its cancer drug Keytruda, Merck has a big dealmaking war chest. Its choice to license an oral GLP-1 still in preclinical testing suggests Merck sees potential to enter the obesity market even though it trails Novo Nordisk, Eli Lilly, Pfizer and Roche.
A licensing deal with Hansoh is relatively inexpensive, compared to a potential acquisition of U.S.-based biotechs like Viking and Structure that have multibillion-dollar market valuations. Merck has made two similarly small development deals with China-based biotechs in recent months: an oncology deal with LaNova Medicines and an immunology pact with Curon Pharmaceutical.
Analysts that cover Viking are still holding hope Merck could make more moves in obesity. “We do not believe the licensing agreement with Hansoh will preclude Merck from expanding its presence in obesity through further external business development activities,” William Blair analyst Andy Hsieh wrote in a Wednesday note to clients.
Merck said it will record a $112 million pre-tax charge, or 4 cents a share, in its fourth quarter 2024 results because of the deal.
Like Wegovy and other treatments in development, HS-10535 is a GLP-1 agonist, meaning it stimulates the hormone’s associated receptor. Hansoh has advanced an injectable drug that targets GLP-1 and another hormone called GIP into Phase 2 testing.
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- Source: https://www.biopharmadive.com/news/merck-hansoh-obesity-license-deal-oral-glp-1/735884/