By Dominic Chopping

Novo Nordisk agreed to pay up to $2 billion for the rights to a developmental weight-loss and obesity drug from Chinese pharmaceutical company the United Bio-Technology (Hengqin) Co., as it looks to boost its pipeline of next-generation drugs.

Novo Nordisk, which earlier Monday lost its crown as Europe's most valuable company, said it signed an exclusive global licensing deal for UBT251, a drug that targets three different hormones to treat obesity, type 2 diabetes, and other diseases.

The Danish pharmaceutical company will pay $200 million up front and potential milestone payments of up to $1.8 billion, as well as tiered royalties.

Novo Nordisk has exclusive rights to develop, manufacture, and commercialize UBT251 globally, excluding the Chinese mainland, Hong Kong, Macau and Taiwan.

UBT251 differs from Novo Nordisk's current portfolio as it takes a three-pronged approach to weight-loss and blood-sugar control. It combines a GLP-1--the same class of drugs as Novo Nordisk's blockbuster Wegovy and Ozempic--with GIP to reduce appetite and blood sugar, and glucagon to prevent low blood-sugar levels.

"The addition of a candidate targeting glucagon, as well as GLP-1 and GIP, will add important optionality to our clinical pipeline, as we look to develop a broad portfolio of differentiated treatment options that cater to the diverse needs of people living with these highly prevalent diseases," said Martin Holst Lange, executive vice president for development at Novo Nordisk.

UBT251 is being developed by United Bio-Technology for multiple indications and has been approved for clinical trials in China on adults with type 2 diabetes, fatty liver disease, chronic kidney disease, and who are overweight or obese. It has also been approved for clinical trials in the U.S. on adults with type 2 diabetes, chronic kidney disease and in those who are overweight or obese.

Novo Nordisk shares have lost half of their value since peaking last summer. The company is busy developing the next generation of drugs that it hopes will turbocharge weight-loss and offer broader health benefits while also reducing side effects. But disappointing results in some trials of its experimental drugs have hit sentiment, while concerns over lower pricing in the U.S. and mounting competitive pressure have also made investors cautious.

Novo Nordisk's main rival in the booming weight-loss market is Eli Lilly, which currently markets its GLP-1/GIP drug Tirzepatide as Zepbound and Mounjaro. The U.S. company is developing its next-generation treatment known as retatrutide, which works in a similar way to UBT251.

The United Bio-Technology is a subsidiary of United Laboratories International Holdings.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

March 24, 2025 07:55 ET (11:55 GMT)

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