Novo Nordisk Secures $1bn Deal for Lexicon's Oral Obesity Drug

The obesity treatment market is anticipated to grow significantly, reaching an estimated $206.5 billion by 2031, according to data from GlobalData. This growth is fueled by advancements and partnerships within the pharmaceutical industry, with Novo Nordisk recently announcing a noteworthy collaboration with Lexicon Pharmaceuticals. The agreement involves a potential investment of up to $1 billion for the exclusive worldwide rights to LX9851, an experimental oral treatment targeting obesity and related metabolic disorders.

Under the terms of the deal, Lexicon will carry out specific preclinical activities before handing over the reins to Novo Nordisk for the subsequent phases of development, manufacturing, and commercialization of LX9851. Lexicon stands to receive $75 million upfront and near-term milestone payments, with the possibility of earning a total of up to $1 billion based on development, regulatory, and sales achievements. This announcement caused a significant surge in Lexicon's stock, which jumped by 85%, while Novo Nordisk's stock remained unaffected by the news.

LX9851 targets Acyl-CoA Synthetase 5 (ACSL5)—a crucial enzyme involved in fat metabolism and energy balance. Promising preclinical results presented at Obesity Week in Texas, US, in November 2024 demonstrated that the combination of LX9851 with Novo Nordisk's leading drug semaglutide—marketed as Ozempic for type 2 diabetes and Wegovy for obesity—enhanced weight loss and reduced food intake and fat mass more effectively than semaglutide alone. Additionally, the data suggested LX9851 may help prevent weight regain after discontinuation of semaglutide treatment.

The collaboration between Novo Nordisk and Lexicon reflects the former’s strategic initiative to bolster its presence in the rapidly expanding obesity treatment market. Novo Nordisk has been a dominant player in the field with its successful glucagon-like peptide 1 receptor agonist (GLP-1RA) Wegovy. However, the company is facing growing competition from Eli Lilly's Zepbound (tirzepatide), which has demonstrated slightly superior efficacy. According to GlobalData, Zepbound is projected to generate $28.2 billion by 2031, while Wegovy is forecast to achieve $26 billion in sales.

The continuous demand for weight-loss treatments, especially oral options that offer ease of administration, has catalyzed various developments in the sector. In January 2025, Verdiva Bio, based in the UK, emerged with $410 million in funding and a pipeline of next-generation oral and injectable therapies, further underscoring the market's growth potential.

Novo Nordisk's expansion efforts have been evident through its proactive investments and acquisitions. The agreement with Lexicon follows the company’s recent $2 billion acquisition of a promising "triple-G" injectable obesity drug, UBT251, from United Laboratories based in China. A randomised Phase Ib trial in China involving 36 patients receiving a subcutaneous 6mg dose of UBT251 over 12 weeks resulted in an average weight loss of 15.1%, showcasing the drug's potential impact on obesity treatment.

Moreover, in January 2025, Novo Nordisk invested $50 million upfront in Variant Bio to investigate genetic targets for obesity and metabolic diseases. In March, the company inked a deal with Gensaic, an AI-driven protein design firm, to develop tissue-targeted therapies for cardiometabolic diseases. These strategic initiatives highlight Novo Nordisk’s commitment to advancing treatment options in the field of obesity and metabolic disorders, positioning itself as a leader in addressing these global health challenges.