Novartis, Septerna Partner to Develop Oral Weight Loss Drugs

Novartis and Septerna have entered into a collaboration and licensing agreement to jointly develop a new generation of oral small molecule drugs targeting obesity, type 2 diabetes, and other cardiovascular diseases, with a particular focus on oral weight loss medications.

Under the terms of the agreement, Septerna is eligible to receive approximately 220 million dollars in total, including over 20 million dollars in upfront and near-term payments. The transaction is contingent on progress and the achievement of certain milestones.

Septerna, headquartered in California, is developing therapeutic approaches targeting G protein-coupled receptors (GPCRs), a class of proteins that play a crucial role in cell signaling. GPCRs influence a wide range of physiological processes, including metabolism, secretion, cell growth, and immune responses. The two companies aim to initiate four potential small molecule therapy development projects targeting selected GPCR targets.

Following the successful launch of its popular weight loss drug Wegovy, Novartis seeks to further solidify its position in the obesity treatment market, which has a potential scale of 1500 billion dollars. The company aims to achieve this through the development of new-generation drugs, acquisitions, and strategic partnerships.

Investors have expressed concerns about Novartis losing its competitive edge in the weight loss drug market to Eli Lilly. Eli Lilly's Zepbound has surpassed Wegovy in prescription volume in the United States since mid-March. Additionally, recent comparative trial data from Eli Lilly indicates that Zepbound's weight loss efficacy is nearly 50% higher than that of Wegovy.

In the rapidly growing market for potent weight loss drugs, oral medications represent a significant future development direction. Novartis is currently seeking regulatory approval for an oral version of Wegovy.

Marcus Schindler, Chief Scientific Officer at Novartis, highlighted the company's rich history of innovation in the fields of obesity and diabetes. "We are leveraging our scientific leadership in this area to develop a series of drugs targeting different pathways and mechanisms, including peptides and small molecules," he stated.

Jeffrey Finer, CEO and co-founder of Septerna, noted that this collaboration presents a significant opportunity to create multiple potential breakthrough oral medications.

This partnership marks the second major deal in the obesity treatment sector in recent months. In March, Roche announced a 530 million dollar agreement to co-develop and commercialize Zealand Pharma's candidate weight loss drug.