Taranabant

Merck is finally making a move in obesity by licensing an oral GLP-1 candidate, though it’s happening years after some of its big pharma peers. Like AstraZeneca did a year ago with Eccogene, Merck went to China to find a preclinical obesity asset. The New Jersey pharma giant is now teaming up with Hansoh Pharma, one of the largest biopharma companies in China, for a candidate known as HS-10535. Merck will dish out $112 million upfront and up to $1.9 billion in biobucks, the companies said Wednesday. In China, Hansoh will co-promote or solely commercialize the drug. The move adds to a busy year of dealmaking for Merck in China. The drugmaker, which is preparing to fill an eventual revenue gap when its $25 billion Keytruda franchise loses patent protection, has signed multiple deals with Chinese companies, including in the hot PD-1xVEGF space and burgeoning bispecific field . Merck has been open about its ability to do multibillion-dollar deals , and CEO Rob Davis has emphasized the importance of combination approaches , particularly in obesity. “If you think of what you have today with the injectable peptides, largely Novo and Lilly today, that’s not an area where we believe the primary opportunity resides,” Davis said Dec. 5 at the Citi Global Healthcare Conference, according to an AlphaSense transcript. At that conference, he also hinted at the potential of oral small molecules. “We are more focused in second- and third-generation oral small molecule opportunities where you can do combinations of a GLP-1 with other agents focusing on outcomes as well as just obesity and the comorbidities that exist,” Davis said then. The drugmaker already has a GLP-1/glucagon receptor co-agonist, dubbed efinopegdutide , in Phase 2 testing in metabolic dysfunction-associated steatohepatitis, or MASH. “We think we have best-in-class liver fat reductions,” Davis said at the Citi conference, describing “Ozempic-like types of weight reductions.” With its hands on a preclinical asset, Merck is still behind multiple other drugmakers in the field. That includes Pfizer, AstraZeneca, Viking, Structure and Roche , which made the last major obesity acquisition when it bought Carmot Therapeutics for $2.7 billion last December. Despite the hype around Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy, other large pharmas like GSK and AbbVie have largely steered clear of obesity. Viking, an obesity drug developer that analysts have speculated could be acquired by Merck, saw its shares $VKTX drop about 9% on Wednesday morning. “Viking shares will understandably sell off today,” William Blair’s Andy Hsieh told investors. “However, we do not believe the licensing agreement with Hansoh will preclude Merck from expanding its presence in obesity through further external business development activities.” About 15 years ago, Merck was working on a CB1 asset called taranabant for obesity. The drugmaker and others scrapped their drugs after side effects sidelined the class.