Danish pharmaceutical company Novo Nordisk has entered into a licensing agreement with Shanghai-based Hengrui Pharma to acquire international rights to an experimental weight-loss pill, in a move aimed at strengthening its position in the obesity drug market. The deal, announced recently, grants Novo exclusive rights to develop, manufacture, and commercialize the drug, known as HRS-1596, outside of mainland China, Hong Kong, Macau, and Taiwan.
Under the terms of the agreement, Novo will pay an upfront fee of $300 million, with total payments potentially reaching $2.6 billion contingent on the achievement of certain developmental and commercial milestones. HRS-1596 is a dual-receptor agonist currently cleared to begin early-stage clinical trials in China for type 2 diabetes and weight loss. The drug distinguishes itself by its potential once-weekly oral dosing regimen, compared to Novo’s existing daily oral obesity medication.
This deal represents Novo’s latest strategic effort to enhance its drug pipeline as it faces increasing competition and prepares for the expiration of patent protections on its semaglutide-based treatments. Semaglutide, the active ingredient in Novo’s Wegovy injections and pills, mimics the GLP-1 gut hormone to suppress appetite and has been central to the company’s market leadership. However, since peaking in mid-2024, Novo’s shares have dropped by roughly 75 percent amid competitive pressures from rivals such as Eli Lilly, which has gained ground in the obesity drug sector.
The new arrangement follows Novo’s recent licensing deal with Sweden’s Nanexa, which could enable patients to use weight-loss injections spaced months apart, reflecting broader efforts to develop more convenient treatment options. Industry analysts have noted that while HRS-1596 is still in early-stage development and unlikely to impact Novo’s near-term performance significantly, its weekly oral dosing presents potential long-term differentiation in the market.
Novo’s CEO, Mike Doustdar, has outlined plans to launch more than five new “multiblocker” drugs by 2030 and expand into various therapeutic areas, signaling a broader growth strategy beyond obesity. The agreement with Hengrui also continues a trend of Western pharmaceutical firms partnering with Chinese biotechs to access innovative drug candidates. Novo’s prior collaboration includes a deal with China’s United Biotechnolgoy for rights to another weight-loss drug targeting multiple hormones.
China’s Hengrui Pharma has been active in forming international partnerships, recently agreeing to a $12 billion collaboration with Britain’s GSK to co-develop a pipeline of drugs across several disease areas, including oncology. Western drugmakers such as AstraZeneca have similarly entered licensing deals with Chinese developers, reflecting the growing importance of China’s biotechnology sector in the global pharmaceutical landscape.