By Bhanvi Satija
(Reuters) -Merck has signed a licensing deal worth up to $2 billion for Chinese biotech Hansoh Pharma’s experimental oral drug to treat obesity on Wednesday, becoming a late contender in the race to offer a weight-loss pill to replace weekly shots.
The U.S. drugmaker said it will develop, manufacture and potentially sell the drug, called HS-10535, which is a GLP-1 receptor agonist candidate similar to injectable rivals from Novo Nordisk and Eli Lilly.
“We see (Merck’s) timing as a challenge,” said Bernstein analyst Courtney Breen, as the product will likely lag behind other contenders such as Lilly’s own weight-loss pill orforglipron.
Companies such as Amgen, Pfizer, Structure Therapeutics and Viking are also testing oral drugs for obesity in the hopes they will provide patients a more convenient option.
AstraZeneca has licensed an experimental weight-loss pill from China’s Eccogene.
Hansoh’s oral drug is currently in the preclinical stage of testing, which typically refers to experiments in animals. It is likely several years away from being commercially launched.
Merck will evaluate the drug and its “potential to provide additional cardiometabolic benefits beyond weight reduction,” said Merck Research Laboratories president Dean Li.
The U.S. drugmaker said it will pay $112 million upfront for an exclusive license to the drug 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.
Shares of Merck rose marginally to $100.80 in premarket trading.
The company had previously said it is focused on second- and third-generation opportunities in the space, such as oral versions as well as those with the potential to treat obesity-related conditions.
Merck is developing its own GLP-1 candidate, efinopegdutide, for a type of serious fatty liver disease known as metabolic dysfunction-associated steatohepatitis.
(Reporting by Bhanvi Satija in Bengaluru; Editing by Krishna Chandra Eluri)
