AstraZeneca Signs Exclusive Licensing Agreement with Chengyi Biotechnology for GLP-1 Receptor Agonist ECC5004 Worth Over $2 Billion USD

On November 9th, Chengyi Biotechnology announced a exclusive licensing agreement with AstraZeneca for their GLP-1 receptor agonist ECC5004, worth over $2 billion USD.

AstraZeneca will gain exclusive development and commercialization rights for Chengyi Biotechnology's core product, ECC5004, in all regions outside of China. In China, Chengyi Biotechnology and AstraZeneca will collaborate on the development and commercialization of ECC5004.

ECC5004 is an orally administered, once-daily, low-dose small molecule GLP-1 receptor agonist that can be used for the treatment of obesity, type 2 diabetes, and other potential co-morbidities.

Currently, ECC5004 is undergoing Phase 1 clinical trials in the United States (NCT05654831). According to registration information on the clinical trials website of the National Institutes of Health, the clinical trial was completed in October. AstraZeneca stated that preliminary results from the Phase 1 trial showed that the drug has differentiated clinical advantages, good tolerability compared to placebo, and can promote reductions in blood glucose and weight.

In the future, AstraZeneca will focus on the development and commercialization of Chengyi Biotechnology's small molecule GLP-1 receptor agonist, ECC5004. According to the terms of the agreement, Chengyi Biotechnology will receive an upfront payment of $185 million USD, as well as up to $1.825 billion USD in clinical, regulatory, and commercial milestones. Additionally, Chengyi Biotechnology will be eligible to receive tiered royalties on net sales of the product.

Sharon Barr, Executive Vice President and Head of Biopharmaceuticals R&D at AstraZeneca, stated that the Phase 1 clinical data for ECC5004 is very promising. Furthermore, oral small molecule GLP-1 receptor agonists have the potential to provide an alternative to the current injectable therapies, both as a potential standalone therapy and for combination therapy in various cardiovascular metabolic diseases, including type 2 diabetes and obesity.

Through this collaboration, ECC5004 further strengthens AstraZeneca's research and development pipeline in the field of gut-mediated and non-gut-mediated insulin pathways, including the GLP-1/glucagon dual agonist AZD9550 and the long-acting insulin-like molecule AZD6234.

On the other hand, ECC5004's advantages extend beyond glucose reduction and weight loss. Dr. Zhou Jingye, CEO of Chengyi Biotechnology, believes that ECC5004 also has potential in various cardiovascular metabolic diseases. GLP-1 receptor agonists, viewed from a perspective beyond glucose reduction and obesity, are also important drugs for the treatment of various cardiovascular metabolic diseases. Currently, the number of patients with cardiovascular metabolic diseases has exceeded 1 billion, and there is an urgent need to continue innovating and developing next-generation treatment options. Unfortunately, there is still a lack of orally administered small molecule GLP-1 receptor agonist drugs that are more accessible to patients in the market, given the large number of patients with chronic diseases.

GLP-1 receptor agonists have gained unprecedented attention due to the expansion of indications and the continuous growth in the demand for glucose reduction and weight loss.

Novo Nordisk, synonymous with GLP-1 drugs, has seen a continuous rise in its stock value. It has raised its profit guidance three times this year and reached a market value that was once "rich enough to rival a country." Its incubated drug, semaglutide, is on track to achieve billions of dollars in sales.

On November 8th, the FDA approved Lilly's GLP-1/GIP dual agonist tirzepatide (brand name Zeposia) for the treatment of obesity.

Following the approval, Lilly's market value rose to $587.7 billion, making it the most valuable publicly traded healthcare company in the world. In comparison, Novo Nordisk's stock price remained stable, but domestic stocks related to weight loss drugs, including companies like Novartis, Borui Pharmaceutical, Jinkai Life Sciences, and Puli Pharmaceutical, all experienced a sharp decline.

With the entry of Lilly, the market dynamics of the GLP-1 market have been reshaped. With its abundant production capacity and a price 20% lower than semaglutide, Lilly will directly compete with Novo Nordisk's semaglutide and share approximately 80% of the weight loss market.

In 2022, tirzepatide achieved total sales of $483 million USD based on its glucose-lowering indication alone. Moreover, as of the first three quarters of this year, the drug has already generated sales of $2.96 billion USD. With the approval for the obesity indication, tirzepatide achieving annual sales of over $10 billion USD is only a matter of time.

The long-acting and oral administration are the evolutionary directions for GLP-1 drugs. The former aims to reduce the dosingfrequency and improve patient convenience, while the latter seeks to offer an alternative to injectable therapies. AstraZeneca's licensing agreement with Chengyi Biotechnology for ECC5004 aligns with this trend and positions the company to tap into the growing GLP-1 market.

It's important to note that the information provided is based on the knowledge available up until September 2021. The status of specific clinical trials, market dynamics, and company developments may have changed since then. For the most up-to-date information, it's recommended to refer to reliable sources and news outlets.