AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) is paying $1.2 billion up-front to seal a tie-up with a Chinese pharma giant aimed at expanding its weight-loss drug pipeline, as it looks to compete in a fast-growing market against the likes of Novo Nordisk's Ozempic and Eli Lilly's Tirzepatide.
The agreement with Hong Kong-listed CSPC Pharmaceutical Group gives the FTSE 100 group global rights outside China to eight drug programmes, including one that is ready to enter human trials.
The portfolio includes a drug known in the clinic as SYH2082, a long-acting injectable designed to mimic appetite-suppressing gut hormones GLP-1 and GIP. The drugs will use CSPC’s LiquidGel technology, which allows for once-monthly dosing.
As a dual agonist targeting GIP and GLP-1, this makes it similar to Lilly's Tirzepatide, known under brands Mounjaro and Zepbound.
AstraZeneca is paying $1.2 billion upfront for access to the programmes and CSPC’s artificial intelligence-driven peptide drug discovery platform, which could rise by another $3.5 billion in milestone payments, before any potential royalties on future sales.
“This strategic collaboration advances our weight management portfolio by delivering novel assets which complement our existing programmes,” said Sharon Barr, executive vice president of the UK company's biopharmaceuticals development.
She said the deal is "an important step in creating a portfolio of simple, scalable and sustainable options that can help people with obesity, and weight-related complications live better, healthier lives."
The agreement builds on existing partnerships between the two companies. CSPC retains rights in China and neighbouring markets.