01:05 PM EST, 12/18/2024 (MT Newswires) -- Merck ( MRK ) secured exclusive rights to develop and sell an oral weight loss drug under a license deal with Hansoh Pharma that could fetch the Chinese biopharmaceutical company up to $2 billion.

Merck ( MRK ) agreed to pay $112 million up front to Hansoh Pharma, in addition to up to $1.9 billion in milestone payments. The agreement covers HS-10535, a pre-clinical small molecule glucagon-like peptide-1, or GLP-1, receptor agonist.

"We continue to leverage science-driven business development to augment and complement our robust pipeline," Dean Y. Li, president of Merck Research Laboratories, said in a joint statement with Hansoh Pharma on Wednesday. "Through this agreement, we aim to build on our experience targeting incretin biology to evaluate HS-10535 and its potential to provide additional cardiometabolic benefits beyond weight reduction."

Merck's ( MRK ) fourth-quarter GAAP and non-GAAP results will reflect a pre-tax charge of $112 million, or $0.04 per share.

In October, the company reduced its full-year adjusted earnings per share guidance to a range of $7.72 to $7.77 from between $7.94 and $8.04. Analysts surveyed by FactSet are modeling non-GAAP EPS of $1.81 for the fourth quarter and $7.74 for the year.

Hansoh Pharma has the option to co-promote or solely commercialize HS-10535 in China, subject to certain conditions.

"Hansoh Pharma is becoming an emerging leader in metabolic diseases, and we see Merck's ( MRK ) expertise and capabilities as key to accelerating the development of this promising asset for patients worldwide," Eliza Sun, executive director of the Hansoh Pharma board, said in the statement.

In November 2023, AstraZeneca ( AZN ) reached an exclusive license deal with Eccogene to develop an oral drug for the treatment of obesity, type-2 diabetes and other cardiometabolic conditions.

Amgen ( AMGN ) and Viking Therapeutics ( VKTX ) are separately developing their respective obesity drugs.

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