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Eli Lilly Acquiring Versanis, Obesity Drug Maker, for $1.9 Billion

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Eli Lilly to Acquire Versanis in a $1.93 Billion Deal

Eli Lilly Broadens Weight Loss Treatment Portfolio

Eli Lilly announced on Friday its plans to acquire Versanis, a privately held obesity drug maker, in a deal worth up to $1.93 billion. This move is aimed at strengthening Eli Lilly's weight loss treatment portfolio. The deal will be structured as a cash payment to Versanis shareholders, including an upfront payment and potential additional payments based on certain development and sales milestones.

Versanis and its Obesity Drug

Based in Oakland, California, Versanis was founded in 2021 by biotech investment firm Aditum Bio. The company currently has one experimental obesity drug called bimagreumab. This drug works by binding directly to specific cells in the body to reduce fat mass. Versanis is currently conducting a phase two trial that investigates the effectiveness of bimagreumab in overweight or obese adults, as well as a trial comparing its treatment with Novo Nordisk's Wegovy and Ozempic.

The Weight Loss Industry Gold Rush

Eli Lilly's acquisition of Versanis is in line with the growing interest in the weight loss industry. Last year, Novo Nordisk's Wegovy and Ozempic injections gained significant popularity, sparking a gold rush in the weight loss market. Approximately 40% of adults in the United States are obese, and analysts predict that the global weight loss drug market will reach a value of $100 billion by 2030.

Potential Benefits of Combining Treatments

Versanis believes that combining bimagreumab with incretin-based therapies, such as Eli Lilly's GLP-1 agonists, could lead to better outcomes for individuals with obesity and cardiometabolic conditions. These conditions include diabetes, kidney disease, and heart disorders. Eli Lilly is actively working on multiple obesity treatments, including the development of its once-weekly experimental injection retatrutide, which has demonstrated weight loss results of up to 24% after 48 weeks. Additionally, the company's experimental obesity pill, orforglipron, has shown weight loss of up to 14.7% after 36 weeks in overweight or obese patients. Eli Lilly is also seeking approval for its type 2 diabetes treatment, Mounjaro, to be used for obesity.

The Impact on New Businesses in the Weight Loss Industry

With Eli Lilly's plans to acquire Versanis and expand its weight loss treatment portfolio, the weight loss industry is experiencing a significant shift. This move reflects the growing interest and investment in obesity treatment, which could have both positive and negative implications for new businesses in the sector.

The Power of Partnership

For new businesses focused on developing innovative weight loss treatments, Eli Lilly's acquisition of Versanis presents an opportunity for collaboration and partnership. The potential to combine Versanis' bimagreumab with Eli Lilly's existing obesity therapies, such as GLP-1 agonists, could result in more effective and comprehensive treatment options for patients. This partnership model could inspire new businesses to seek collaborations with established pharmaceutical companies, enhancing their chances of success in the competitive weight loss market.

A Challenging Competitive Landscape

However, Eli Lilly's strengthened weight loss treatment portfolio also means increased competition for new businesses entering the industry. The success of Novo Nordisk's Wegovy and Ozempic injections has sparked a "gold rush" in the weight loss market, attracting investors and driving up market expectations. With analysts predicting the global weight loss drug market to reach $100 billion by 2030, new businesses will face the challenge of differentiating themselves and standing out among established players.

Opportunities for Niche Focus

While competing with large pharmaceutical companies may seem daunting, there are still opportunities for new businesses to thrive by focusing on niche areas within the weight loss industry. For example, targeting specific patient populations or developing personalized treatments can help differentiate a new business from larger competitors. By offering unique and innovative solutions, new businesses can carve out a niche market and establish a strong presence.

In conclusion, Eli Lilly's acquisition of Versanis highlights the growing interest and investment in the weight loss industry. While it presents collaboration opportunities for new businesses, the competitive landscape demands innovation and niche focus to succeed in this rapidly expanding market.

Article First Published at: https://www.cnbc.com/2023/07/14/eli-lilly-to-acquire-obesity-drug-maker-versanis-for-1point9-billion.html

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