Wegovy maker Novo Nordisk enters research tie-ups with US biotech firms

[January 04, 2024]  By Maggie Fick

LONDON (Reuters) -Blockbuster weight-loss drug maker Novo Nordisk announced on Thursday research collaborations with two U.S. biotech firms, part of its efforts to stay ahead in big pharma's race to develop more treatments for cardiometabolic diseases.

Novo, a Danish drugmaker whose share price rose 49% last year due to soaring demand for its weight-loss medicine Wegovy, said the partnerships with Omega Therapeutics and Cellarity Inc could lead to new treatments for people living with obesity and a type of liver disease known as MASH.

Shares of Cambridge, Massachusetts-based Omega, which had a market capitalization of about $150 million as of Wednesday's close, nearly doubled to $5.38 in U.S. premarket trading.

The two separate research and development collaborations are the first announced under a framework deal that Novo signed in 2022 with Flagship Pioneering, a U.S. investment firm focused on life sciences.

Omega and Cellarity are both portfolio companies of Flagship. The companies will jointly conduct pre-clinical trial drug development work with Novo. After that, Novo could advance the programmes into clinical studies, it said in a statement.

Under the terms of the respective agreements, Novo will reimburse research and development (R&D) costs. Each agreement may pay up to $532 million in upfront, development and commercial milestone payments, as well as tiered royalties on annual net sales of a licensed product, to be shared between the respective companies and Flagship.

The logo of Danish drugmaker Novo Nordisk in their offices in Hillerod, Denmark, September 26, 2023. REUTERS/Tom Little/File Photo

Uli Stilz, vice president of Novo's Bio Innovation Hub in Cambridge, Massachusetts, told Reuters that the project will enable innovation which neither Novo nor the other companies could do alone.

Stilz, who will run the research partnerships, said the work runs parallel to Novo's later-stage clinical collaborations and its acquisition of other companies through bolt-on deals which ramped up last year as the company's war chest grew on record profit. "I can confirm that we will do all of it."

(Reporting by Maggie Fick, additional reporting by Khushi Mandowara; editing by David Evans)

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