Merck Signs $2 Billion Licensing Deal for Weight Loss Pill with Chinese Drugmaker Hansoh Pharma

Merck announced on Wednesday that it has secured the rights to an experimental weight loss pill from Chinese drugmaker Hansoh Pharma in a deal worth up to $2 billion. This oral drug, currently not in human trials, could position Merck to capitalize on the rapidly expanding obesity drug market, which analysts predict could exceed $100 billion annually by the early 2030s.

While Merck did not specify the diseases it plans to target first with this drug, the deal significantly boosts its potential in the obesity treatment field. The move comes as several other pharmaceutical companies, including Pfizer and Roche, are working to develop competitive oral weight loss medications that can challenge the blockbuster injectable drugs from Novo Nordisk and Eli Lilly.

Under the terms of the agreement, Merck will receive exclusive global rights to develop, manufacture, and commercialize Hansoh Pharma’s HS-10535, an oral drug targeting GLP-1, a gut hormone. GLP-1 is the same target for Novo Nordisk’s popular weight loss drug Wegovy and diabetes medication Ozempic, which work by suppressing appetite and regulating blood sugar levels.

Merck will pay Hansoh Pharma an upfront fee of $112 million for the licensing rights to the drug. Additionally, the deal includes up to $1.9 billion in milestone payments and royalties on future sales, according to a press release from the company.

Merck’s president of Research Laboratories, Dean Li, expressed confidence in the drug’s potential, noting it could offer “additional cardiometabolic benefits beyond weight reduction.” The company has been actively seeking GLP-1 treatments that provide not just weight loss but other health benefits, such as improvements in cardiovascular health, diabetes, and fatty liver disease. Merck CEO Rob Davis highlighted this strategic focus in early 2023, stating that therapies with broader health benefits would be crucial for obtaining reimbursement and establishing long-term market success.

This agreement with Hansoh Pharma adds to the growing trend of Chinese companies entering the global market for GLP-1-based treatments. In a similar deal last year, AstraZeneca licensed an experimental oral GLP-1 drug from Chinese company Eccogene, which is currently in mid-stage development.