Pfizer adds to obesity bet with up to $2.1 billion deal to develop Chinese company's pill 

Pfizer connected Tuesday said it has struck an up to $2.1 cardinal licensing deal with YaoPharma to make and commercialize its obesity pill, furthering the pharmaceutical company's push into the value nonaccomplishment space. 

Pfizer volition wage YaoPharma, a subsidiary of Chinese drugmaker Shanghai Fosun Pharmaceutical, an upfront outgo of $150 million. YaoPharma could besides person up to $1.94 cardinal successful milestone payments, on with tiered royalties connected income if the cause is approved. 

YaoPharma's cause works by targeting the aforesaid gut hormone, GLP-1, arsenic Novo Nordisk's blockbuster value nonaccomplishment injection Wegovy. But the pill is inactive successful early-stage development, which means it volition instrumentality respective years earlier it reaches patients. 

The woody volition assistance Pfizer beef up and diversify its obesity cause pipeline aft a drawstring of setbacks, including its decisions to scrap 2 antithetic pills implicit the past 2 years. The drugmaker boosted its prospects successful the competitory abstraction with its up to $10 cardinal acquisition of the obesity biotech Metsera past month, pursuing a fierce bidding warfare with Novo Nordisk. 

"We look guardant to contributing our expertise and resources to proceed the improvement of this investigational GLP-1 tiny molecule which complements and strengthens our increasing portfolio of caller candidates for treating obesity and its adjacent diseases," said Chris Boshoff, Pfizer's main technological officer, successful a statement. 

Under the presumption of the agreement, YaoPharma volition behaviour a signifier 1 proceedings connected its drug, portion Pfizer volition instrumentality power of aboriginal development. Pfizer besides plans to behaviour studies combining YaoPharma's attraction with its ain cause targeting different gut hormone receptor called GIP, which is presently successful mid-stage development.

That operation isn't caller successful the space: Eli Lilly's value nonaccomplishment injection Zepbound and diabetes cause Mounjaro usage a dual attack of targeting some GLP-1 and GIP. 

In a enactment connected Tuesday, BMO Capital Markets expert Evan Seigerman said constricted accusation is disposable connected YaoPharma's drug, called YP05002. But Seigerman said helium views "obesity diversification arsenic promising successful the abbreviated term" for Pfizer. 

He added that Pfizer's $150 cardinal upfront outgo reflects "prudent superior conservation successful airy of the caller Metsera bidding war."

The accidental to participate the booming value nonaccomplishment cause marketplace could beryllium immense for Pfizer. Some analysts expect the value nonaccomplishment cause abstraction could beryllium worthy astir $100 cardinal by the 2030s.