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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowNovo Nordisk A/S is partnering with U.S. biotech Septerna Inc. on the development of oral pills for obesity in a deal potentially worth up to $2.2 billion.
The two companies will start with four development programs that use different ways to potentially treat obesity, Type 2 diabetes and other diseases linked to obesity, the Danish maker of blockbuster weight-loss drug Wegovy said Wednesday.
The deal terms are linked to progress and milestones achieved and include more than $200 million in upfront and near-term payments. In the future, the U.S. company could also receive royalties on the sales of any approved products.
Septerna shares had climbed 55% by 11 a.m. Novo shares rose as much as 1.9% in premarket trading after the announcement before losing that gain and then some. The stock is down about 51% in the past year, amid investor concern about Novo’s competitiveness in the obesity market.
Pills are a key next-generation technology in the growing market for powerful obesity medicines. It’s an area where Novo has struggled to keep pace with U.S. rival Eli Lilly & Co., which announced promising results from a large study of its own tablet in diabetes patients last month.
Last month’s trial results showed patients taking Lilly’s drug lost 16 lbs, or 7.9% of their body weight. That compares favorably with Novo’s Ozempic, where diabetic patients on the highest dose lost roughly 6% of their body weight. Lilly said patients hadn’t yet reached a weight plateau at the time the study ended, indicating that patients might lose more weight.
The trial was one of several that the Indianapolis-based drugmaker is running to test the drug, called orforglipron, in diabetes, obesity and other related conditions like sleep apnea.
Novo is seeking regulatory approval for its pill version of Wegovy, but Wegovy-in-a-pill is far from a simple drug. It requires large amounts of active ingredients to produce, and patients will need to take it a half hour before eating or drinking anything in the morning. The company already sells a pill version of Ozempic, which has a fraction of the sales of the injected version of the drug.
Septerna has developed a technology that allows it to screen billions of potential molecules, which could help in the development of new treatments targeting different conditions, the two companies said.
The collaboration will provide a “significant opportunity to create multiple potentially groundbreaking oral medicines,” Jeffrey Finner, chief executive officer and co-founder of Septerna said.
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