In a move to expand its portfolio in the obesity treatment market, Merck & Co., Inc. (NYSE: MRK) has announced a licensing deal worth up to $2 billion with Chinese biotech firm Hansoh Pharmaceutical Group (HKEX: 3692).
Merck signs up to $2 billion deal for oral weight-loss drug with China’s Hansoh
Researcher Daily
The agreement centers on the development and commercialization of an experimental oral weight-loss drug, HS-10535. The U.S. pharmaceutical giant will pay $112 million upfront for exclusive rights to the GLP-1 receptor agonist, with Hansoh eligible for up to $1.9 billion in milestone payments, plus royalties on future sales.
Aiming for an Oral Alternative
HS-10535 is currently in the preclinical testing phase, focusing on animal studies, with commercial availability expected to take several years. The drug aims to compete with injectable weight-loss treatments such as Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro by providing a more convenient oral option.
“We are excited to evaluate the potential of HS-10535, not just for weight reduction but also for broader cardiometabolic benefits,” said Dean Li, President of Merck Research Laboratories.
Merck’s entry into the oral obesity drug race positions it alongside competitors such as Eli Lilly, Pfizer, Amgen, Structure Therapeutics, and Viking Therapeutics, all of whom are vying for a share of this rapidly expanding market. Lilly’s own oral drug, orforglipron, is already in advanced stages of development, raising questions about Merck’s ability to compete as a late entrant.
We see Merck’s timing as a challenge,” noted Bernstein analyst Courtney Breen.
Strategic Investments in Obesity-Related Research
This deal aligns with Merck’s focus on second- and third-generation obesity treatments, including oral therapies and solutions targeting obesity-related conditions. The company is also developing efinopegdutide, a GLP-1 candidate for metabolic dysfunction-associated steatohepatitis, a severe fatty liver disease.
The news of the agreement marginally boosted Merck’s stock, which traded at $100.80 in premarket activity. Analysts view the deal as a significant, albeit ambitious, step in Merck’s efforts to solidify its position in the obesity market.
