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Merck Strikes $2 Billion Deal with Hansoh Pharma for Oral Weight-Loss Drug

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Merck (MRK.N) has entered a licensing agreement worth up to $2 billion with Chinese biotech firm Hansoh Pharma (3692.HK) for the development of an experimental oral weight-loss drug, HS-10535. This move positions Merck as a new competitor in the race to deliver an alternative to injectable weight-loss treatments.

Details of the Agreement

Under the agreement, Merck will assume responsibility for developing, manufacturing, and commercializing the drug. Hansoh’s HS-10535 is a GLP-1 receptor agonist candidate, designed to emulate the effects of injectable weight-loss drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro.

Merck will pay Hansoh an upfront fee of $112 million for the exclusive license, with potential milestone payments of up to $1.9 billion based on development, regulatory progress, and sales achievements. Hansoh will also receive royalties on future sales.

Competitive Landscape

Merck faces stiff competition in the burgeoning weight-loss market. Its oral drug candidate will likely trail behind rivals such as Eli Lilly’s orforglipron, which is further along in development. Other pharmaceutical giants, including Pfizer, Amgen, and Structure Therapeutics, are also testing oral obesity treatments, while AstraZeneca has partnered with China’s Eccogene on a similar initiative.

HS-10535 is currently in the preclinical testing phase, focusing on animal studies, meaning it could be several years before it reaches commercial availability. However, Merck sees potential in the drug not only for weight loss but also for delivering cardiometabolic benefits, according to Merck Research Laboratories president Dean Li.

Merck’s Broader Strategy

This deal reflects Merck’s broader focus on second- and third-generation weight-loss treatments, particularly oral solutions that may offer added convenience over injectables. Beyond HS-10535, Merck is also developing efinopegdutide, a GLP-1 candidate targeting metabolic dysfunction-associated steatohepatitis (MASH), a severe fatty liver disease associated with obesity.

Despite entering the weight-loss race later than its competitors, Merck aims to carve a niche in the field by emphasizing treatments that address obesity-related conditions alongside weight reduction.

Market Response and Implications

Shares of Merck rose slightly to $100.80 in premarket trading following the announcement. Analysts, however, expressed concerns about the timing, as Merck’s drug will likely lag behind more advanced contenders.

Weight-loss treatments, particularly GLP-1 receptor agonists, are shaping up to be a multibillion-dollar market, driven by increasing global demand for effective and convenient solutions to obesity. The licensing deal with Hansoh signifies Merck’s commitment to becoming a key player in this competitive market.

 

NICE to Recommend Eli Lilly’s Obesity Drug Mounjaro for NHS Use

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The UK’s National Institute for Health and Care Excellence (NICE) announced on Thursday that it plans to recommend Eli Lilly’s obesity drug Mounjaro for use through the National Health Service (NHS), potentially benefiting 220,000 patients over the next three years.

Previously available in the UK only through private, out-of-pocket purchases, Mounjaro, launched in February 2023, will now be prescribed alongside lifestyle changes like diet and exercise. The eligibility criteria include individuals with a body mass index (BMI) over 35 and at least one weight-related condition such as heart disease or type 2 diabetes.

Phased Rollout and Eligibility

Approximately 3.4 million people in England could qualify for the treatment under the stated guidelines. However, during the initial rollout, priority will be given to those with the highest clinical need. The drug will become accessible to NHS patients starting 90 days after NICE’s final guidance is published, scheduled for December 23, unless appeals are lodged. Patients who are part of specialist NHS weight management services will gain earlier access, while others may need to wait up to 180 days.

The phased rollout is essential to ensure that healthcare providers can continue addressing the broader range of patient needs, NICE stated.

Mounjaro’s Potential Impact

Mounjaro, part of the GLP-1 analogue drug class, was initially developed to manage blood sugar levels in type 2 diabetes patients but has shown remarkable efficacy in promoting weight loss. Clinical trials demonstrated an average weight loss of nearly 23%, making it one of the most effective options for obesity management.

This recommendation aligns with earlier guidelines issued by NICE for Novo Nordisk’s Wegovy in March 2023, which targets the same BMI threshold and weight-related conditions.

Addressing Britain’s Obesity Crisis

With nearly one in three adults in Britain classified as obese—the highest rate in Europe according to a 2019 OECD report—Mounjaro offers a new tool to address the nation’s obesity epidemic. The European Union’s obesity average stands at 16.5%, highlighting the urgent need for interventions in the UK.

Eli Lilly has welcomed NICE’s decision and acknowledged the necessity of a phased introduction, ensuring the drug is integrated effectively into the NHS system.

Novo Nordisk India Pushes for Early Wegovy Launch Amid Rising Competition

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Novo Nordisk’s Indian team is urging the Danish pharmaceutical company to expedite the launch of its weight-loss drug Wegovy to counter Eli Lilly’s upcoming rival product, Mounjaro. Sources close to the discussions revealed that while Novo originally planned a 2026 India launch, internal teams are advocating for a 2024 rollout.

Key Developments

  • Launch Timeline: Initially slated for a 2026 release, Novo’s India team is lobbying for a 2024 launch of Wegovy, aligning with Eli Lilly’s expected introduction of Mounjaro.
  • India’s Market Dynamics: India has seen a sharp rise in obesity rates, with government data showing 24% of women and 23% of men classified as overweight or obese.
  • Rising Demand: Obesity treatment awareness campaigns by Novo have spurred interest, with many patients inquiring about weight-loss medications.

Industry Challenges

  • Global Supply Issues: Novo Nordisk and Eli Lilly are grappling with high demand for their GLP-1 receptor agonist drugs, limiting immediate global availability.
  • Regulatory Status: Novo received approval for semaglutide, Wegovy’s active ingredient, in India in late 2022 but awaits further production scale-ups.
  • Competition: India’s generic drugmakers, including Cipla and Dr. Reddy’s, are preparing lower-cost versions, while Sun Pharma is developing its own GLP-1-based experimental drug.

Broader Context

Novo launched Wegovy in China last month at a competitive price of 1,400 yuan ($193.27) per starter dose, significantly lower than the U.S. list price of over $1,300. This pricing strategy may influence its approach in India, where affordability is crucial.