Spending nearly $500 million, Pfizer(PFE.US) partners with Chinese biotech, increasing investment in the weight loss drug market in China

Reuters Finance APP has learned that American pharmaceutical giant Pfizer (PFE.US) has reached an agreement with domestic startup Hangzhou Xianwei Da Biological Technology Co., Ltd. to obtain exclusive commercialization rights for one of its weight loss therapies in China. This move aims to strengthen its presence in the high-growth weight loss market.

According to a statement, the deal involves the drug ecnoglutide. The drug was recently approved in China for the treatment of diabetes and is currently under regulatory review for its use in weight loss.

Xianwei Da stated that the total value of the deal could reach up to $495 million, including upfront payments and milestone-based subsequent payments, but specific details were not disclosed.

Pfizer has been actively pursuing a leading position in the weight loss drug sector. Pfizer China President said in the statement that this collaboration “accelerates Pfizer’s long-term strategic layout in the metabolic field to meet the growing needs of Chinese patients.” He pointed out that obesity affects 14.1% of Chinese adults and has been prioritized in the government’s “Healthy China” initiative.

Pfizer is seeking to rebuild its business in the post-pandemic era. With many core products facing increased competition and its initial attempts to enter the weight loss market facing setbacks, the company is under pressure to find new sources of revenue.

The partnership with Xianwei Da is also expected to boost Pfizer’s business in China. It is understood that by 2024, China accounts for 4% of Pfizer’s total revenue, but the company has undergone multiple restructurings in recent years. In the Chinese weight loss market, Pfizer will face competition from global pharmaceutical giants and domestic rivals like Innovent Biologics.

Xianwei Da’s ecnoglutide has a similar mechanism of action to Novo Nordisk’s semaglutide (Ozempic), both mimicking a natural hormone called glucagon-like peptide-1 (GLP-1) to regulate blood sugar and suppress appetite. However, the company believes that its slightly different structure makes it more effective and safer than other GLP-1 receptor agonists. In a late-stage study, ecnoglutide achieved weight loss results comparable to Eli Lilly’s tirzepatide (Zepbound).

Under the agreement with Pfizer, Xianwei Da will remain responsible for the development, registration, manufacturing, and supply of the drug.