Novo Nordisk Expands Obesity Pipeline with $1B Lexicon Deal

Novo Nordisk, a leader in the obesity and diabetes treatment space, has made a significant move to bolster its obesity drug pipeline. The Danish pharmaceutical giant has entered into a licensing agreement with Lexicon Pharmaceuticals, potentially worth up to $1 billion, for the development of a novel non-incretin obesity drug candidate.

Deal Structure and Financial Terms

The agreement, announced on Friday, involves Novo Nordisk paying up to $75 million in upfront and near-term milestone payments to Lexicon. The Texas-based biotech company stands to receive additional development, regulatory, and sales-based milestone payments, with the total deal value reaching $1 billion. Lexicon will also be eligible for tiered royalties on net sales if the drug candidate receives regulatory approval.

LX9851: A New Approach to Obesity Treatment

At the center of this deal is Lexicon's molecule LX9851, which represents a departure from Novo Nordisk's current flagship products in the obesity market. Unlike semaglutide, the active ingredient in Ozempic and Wegovy, LX9851 is not an incretin-based therapy.

LX9851 targets ACSL5, a liver enzyme involved in lipid metabolism. This novel mechanism of action is believed to help regulate energy balance and fat accumulation. Additionally, the drug candidate may induce feelings of satiety by slowing gastric emptying, potentially offering a multi-faceted approach to weight management.

Preclinical Promise and Development Plans

Lexicon presented encouraging preclinical data for LX9851 in November 2024. In vivo studies in mice demonstrated significant reductions in food intake, fat mass, and overall weight. The drug candidate also showed potential in mitigating weight regain after discontinuation of semaglutide treatment and exhibited positive effects on liver steatosis.

Under the terms of the agreement, Lexicon will complete IND-enabling activities for LX9851. Novo Nordisk will then take the reins, assuming responsibility for filing the IND, conducting clinical development, and handling manufacturing and commercialization efforts.

While specific development plans for LX9851 have not been disclosed, Jacob Sten Petersen, Senior Vice President for Novo's Diabetes, Obesity and MASH therapeutic areas, emphasized that the Lexicon deal aligns with the company's strategy to address the diverse needs of individuals living with obesity and other metabolic diseases.