Merck desires to develop weight reduction pills from Chinese drugmaker as a part of a licensing agreement value as much as $2 billion

Merck announced Wednesday that it has secured the rights to an experimental weight-loss pill from Chinese drugmaker Hansoh Pharma in a deal value as much as $2 billion.

The oral drug has not yet been tested in humans, and Merck has not specified which diseases it plans to check the drug on first. Still, it increases the drug company's probabilities of capturing a slice of the booming obesity drug market, which some analysts expect to be value greater than $100 billion a 12 months by the early 2030s.

Several other drug manufacturers including Pfizer And Rocheare in search of to develop more practical obesity pills that may compete with the blockbuster injections from Novo Nordisk and Eli Lilly.

Under the agreement, Merck will receive the exclusive worldwide license to develop, manufacture and commercialize Hansoh Pharma's HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisks The popular weight reduction drug Wegovy and the diabetes drug Ozempic also goal GLP-1 to suppress appetite and regulate blood sugar.

Merck can pay Hansoh $112 million upfront for the rights to the drug, with the potential for a further $1.9 billion in milestone payments and royalties. in line with a press release.

Merck said its fourth-quarter results will include a pretax charge of $112 million, or 4 cents per share.

In the press release, Dean Li, president of Merck Research Laboratories, said the oral drug “has the potential to provide additional cardiometabolic benefits beyond weight reduction.”

Merck CEO Rob Davis said early last 12 months that the corporate was in search of GLP-1 treatments with advantages beyond weight reduction.

“I feel everyone recognizes that weight management is difficult to reimburse. But in the event you can show cardiovascular outcomes, in the event you can show diabetes outcomes, which you're beginning to see data for, in the event you can see advantages in fatty liver disease…” “That's an area where we expect there's opportunity,” he said at the time at a conference.

This is the latest transaction involving experimental GLP-1 drugs from China. AstraZeneca Last year, Chinese company Eccogene licensed its experimental oral drug, which is now in mid-stage development.