The Danish pharmaceuticals company behind the weight-loss jab Wegovy has agreed to buy a US-listed biotech for up to $5.2 billion, the first big deal under its new chief executive.
Novo Nordisk will acquire Akero Therapeutics, a clinical-stage company developing a treatment for fatty liver disease, called efruxifermin.
Novo is the latest big pharma company to acquire a potential treatment for metabolic dysfunction-associated steatohepatitis (Mash) as the industry races to develop pipeline drugs for common complications of obesity.
Last month Roche, the Swiss multinational, agreed to buy 89bio, a San Francisco-based, Nasdaq-listed biotech company specialising in a late-stage treatment for the disease, while in August Novo received US regulatory approval for Wegovy to be used to treat the disease in adults with liver fibrosis.
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Other big pharma companies have also been investing in the liver disease market, including GSK, one of Britain’s two pharmaceutical companies, which in May agreed to pay up to $2 billion to acquire the lead asset of Boston Pharmaceuticals.
Novo is seeking to regain its momentum in the burgeoning obesity drugs market after this year abruptly replacing its chief executive and then moving to cut about 9,000 jobs as part of a restructuring, the cost of which further weakened its full-year profit forecasts.
Mike Doustdar, who was appointed chief executive in July alongside a profit warning and following the ousting of Lars Fruergaard Jorgensen in May, has said the Copenhagen-based company will retain a focus on developing next-generation obesity and diabetes drugs, which can also be used to treat related cardiometabolic conditions. Novo said that with more than 40 per cent of patients with the liver disease also having type 2 diabetes, and more than 80 per cent of them overweight or living with obesity, it was closely linked with its expertise.
Doustdar said: “Mash destroys lives silently and efruxifermin has the potential to change that by reversing liver damage.” Efruxifermin is being studied as a once-weekly injection in a phase III programme of three clinical trials.
Novo’s new chief executive, Mike Doustdar
REUTERS
“If approved, we believe it could become a cornerstone therapy, alone or together with Wegovy, to tackle one of the fastest-growing metabolic diseases of our time.”
The breakthrough approval of Wegovy, or semaglutide, as an obesity treatment in 2021 in the US, the world’s most lucrative market, and its approval last year to reduce the risk of cardiovascular problems, turned Novo into Europe’s most valuable company, which at its peak that June was worth more than $600 billion.
However, Novo has lost about two thirds of its market value since then because it has faced increasing competition, particularly from its Americal rival Eli Lilly, the maker of Mounjaro, and cheaper copycat versions of semaglutide being manufactured in response to supply shortages in the US. Investors have also been concerned at research and development setbacks with next-generation drugs.
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Novo, advised by BofA Securities, will acquire Akero for $54 per share in cash, or $4.7 billion, plus a potential additional payment of $6 per share in cash if efruxifermin is approved by US regulators. The deal, which will be mainly debt financed, is expected to increase Novo’s research and development costs next year, weakening its full-year operating profit growth.
Shares in Novo fell by 1.3 per cent in Copenhagen on Thursday.