Is Texas cheaper than China?
It looks that way when it comes to preclinical deals in the obesity/diabetes space. Two weeks ago, I noted that Merck's licensing deal with the Chinese biotech Jiangsu Hansoh Pharmaceutical Group Co., Ltd. for rights to a preclinical oral GLP-1 RA asset outside of China was not cheap at $112m upfront and up to $1.9bn in biobucks.
Novo Nordisk is paying Texas-based Lexicon Pharmaceuticals, Inc."$75 million in upfront and near-term milestone payments to secure global rights to a preclinical prospect that paired well with its GLP-1 blockbuster semaglutide in mice" (thank you for this article, Fierce Biotech's Nick Paul Taylor!, link in the comments), and up to $1bn plus royalties if everything goes perfectly (as it always does 😵💫). Granted, it's not an oral GLP-1RA, the biggest FOMO inducer in pharma. But it is an oral, "small-molecule candidate, LX9851, [...] designed to increase the feeling of fullness by inhibiting ACSL5" (a protein that plays a crucial role in fatty acid metabolism, particularly in the liver, small intestine, and adipose tissue, by catalyzing the formation of acyl-CoAs from long-chain fatty acids). And it looks like, in mice at least, weight loss persists after treatment ends, unlike with semaglutide or tirzepatide. As the article notes, the new mechanism of action comes with increased uncertainty in clinical trials -but I would argue that a well-designed Phase 1 will quickly detect signs of efficacy.
I don't necessarily think this deal is "cheap", I don't know enough. But it does show, once again, that deals with Chinese biotechs are not cheap and their assets high quality, a surprise to exactly no one who has been watching that space. What do they say? Oh, right, don't mess with China.
Simon Birksø Larsen, Alex Zhavoronkov, Luke Timmerman, Andrii Buvailo, Ph.D., Andrew Dunn