Merck (NYSE:MRK) on Wednesday said it has snagged the rights to an experimental weight loss pill from Chinese drugmaker Hansoh Pharma, in a deal worth up to $2 billion.
The oral drug has not yet entered human trials, and Merck did not specify which diseases it plans to test the drug on first. Still, it boosts the pharmaceutical company’s chances of winning a slice of the booming obesity drug market, which some analysts expect to be worth more than $100 billion a year by the early 2030s.
Several other drugmakers, including Pfizer (NYSE:PFE) and Roche, are racing to develop more convenient obesity pills that can compete with blockbuster injections from Novo Nordisk and Eli Lilly.
Under the terms of the deal, Merck will gain the exclusive global license to develop, manufacture and commercialize Hansoh Pharma’s HS-10535, an experimental oral drug that targets a gut hormone called GLP-1. Novo Nordisk’s (NYSE:NVO) popular weight loss drug Wegovy and diabetes treatment Ozempic similarly target GLP-1 to tamp down appetite and regulate blood sugar.
Merck will pay Hansoh $112 million upfront for rights to the drug, with the potential for an additional $1.9 billion in milestone payments and royalties on sales.
MRK shares declined 22 cents to $99.84.