(NewsNation) — AbbVie, an Illinois-based pharmaceutical company, entered into a contract to develop an obesity medication with Gubra, a Danish drugmaker.
Under the agreement, which was detailed in a Monday news release, AbbVie will give Gubra up to $1.875 billion in “development, commercial and sales milestone payments,” including tiered royalties based on global net sales.
The deal’s closure is still subject to regulatory approvals. STAT News wrote the agreement happened less than a year after Robert Michael became AbbVie’s CEO. It also comes after the patent for AbbVie’s autoimmune medicine, Humira, expires.
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“Obesity represents a significant global health concern with nearly 900 million adults with obesity, many of whom struggle to stay on current treatment options,” Dr. Roopal Thakkar, executive vice president of research and development and chief scientific officer at AbbVie, said in a statement. “Building on Gubra’s experience in the discovery of novel peptide-based therapeutics, we look forward to advancing the development of the GUB014295 program.”
The drug, currently called GUB014295, mimics amylin, a hormone that has been identified as a way to treat obesity because it activates signals to the brain that result in appetite suppression and reduced food intake. It is in the first phase of a clinical trial.
“This collaboration between Gubra and AbbVie will accelerate the development of GUB014295 and build on the promising data shown in its Phase 1 single ascending dose (SAD) trial,” Henrik Blou, chief executive officer of Gubra, said.
Other obesity treatments, such as Wegovy by Novo Nordisk, use a hormone called GLP-1 to control appetite, while Eli Lilly’s Zepound targets GLP-1 and another hormone called GIP, CNBC reports.
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In a research note, BMO analyst Evan Seigerman said that “we’re positive on the deal” for AbbVie, according to CNBC.
Abbvie’s entrance into the obesity market, Seigerman wrote, could “come with synergies” to additional areas of its business. These include inflammation and aesthetics since the company offers services such as Botox, skin care and body contouring.
“We see an opportunity for AbbVie to leverage their expertise in this space to better understand these potential benefits,” Seigerman said, per the news outlet.
Bloomberg noted that the obesity drug market is expected to reach as much as $130 billion in annual sales by 2030.
