Novo Nordisk Strikes US$1B deal with Lexicon for oral obesity drug

DENMARK—Novo Nordisk has entered into an exclusive agreement with Lexicon Pharmaceuticals to bolster its presence in the obesity treatment market.

This deal, valued at up to US$1 billion, grants Novo Nordisk global rights to LX9851, an innovative oral medication designed to combat obesity and related metabolic disorders.

Under the terms of the agreement, Lexicon will complete specific preclinical activities before handing over the reins to Novo Nordisk for further development, manufacturing, and commercialization.

Lexicon stands to gain substantially from this partnership, with an initial payment of US$75 million and the potential to earn up to US$1 billion through various development, regulatory, and sales milestones.

Additionally, Lexicon will receive tiered royalties on net sales of LX9851, providing a steady stream of income if the drug proves successful in the market.

This financial boost has already had a profound impact on Lexicon’s stock, which surged by 85% following the announcement, rising from US$0.35 to US$ 0.65.

In contrast, Novo Nordisk’s stock remained stable, reflecting the company’s established position in the pharmaceutical industry.

LX9851 targets Acyl-CoA Synthetase 5 (ACSL5), an enzyme crucial for fat metabolism and energy balance.

Preclinical data presented at Obesity Week in Texas in November 2024 highlighted the potential of the drug when combined with Novo Nordisk’s flagship GLP-1 agonist, semaglutide.

This combination resulted in more significant weight loss and reductions in food intake and fat mass compared to semaglutide alone.

Moreover, LX9851 showed promise in preventing weight regain after discontinuing semaglutide treatment, addressing a significant challenge in obesity management.

Novo Nordisk’s Senior Vice President, Jacob Sten Petersen, expressed enthusiasm for the partnership, stating that it allows the company to explore novel biology and treatment paradigms.

This move aligns with Novo Nordisk’s broader strategy to strengthen its position in the obesity treatment market, which is projected to reach US$206.5 billion by 2031.

 The company faces increasing competition from Eli Lilly’s Zepbound (tirzepatide), which is forecast to outperform Novo Nordisk’s Wegovy in sales by 2031.

The demand for effective weight-loss treatments, particularly oral medications that are easier to administer, continues to grow.

 This trend is underscored by the recent launch of UK-based Verdiva Bio, which debuted with a substantial investment of US$410 million and a focus on next-generation oral and injectable therapies.

Novo Nordisk has been actively expanding its pipeline for obesity and metabolic diseases.

The agreement with Lexicon follows the company’s recent acquisition of UBT251, a promising injectable obesity drug from China-based United Laboratories, for US$2 billion.

Additionally, Novo Nordisk invested US$50 million upfront in Variant Bio to explore genetic targets for obesity and metabolic diseases.

In another strategic move, the company partnered with AI-driven protein design firm Gensaic to develop tissue-targeted therapies for cardiometabolic diseases.

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