Obesity drug maker Versanis to be bought by Eli Lilly

Eli Lilly Friday said it would get Versanis, a privately held company obesity drug manufacturerup to $1.93 billion to bolster the pharma giant’s portfolio of weight loss treatments.

Lilly agrees to pay Palace of Versailles Shareholders are paid in cash, which includes an upfront payment and possible subsequent payments if Versanis achieves certain “development and sales milestones.”

Based in Oakland, California, Versanis was founded in 2021 by biotech investment firm Aditum Bio, which has an experimental drug to treat obesity and other underlying diseases.

Eli Lilly shares rose 3% on Friday following the news.

The deal is Lilly’s latest attempt to capitalize on the weight-loss industry’s gold rush, which began last year Novo Nordisk’Blockbuster injectables Wegovy and Ozempic are wildly popular.

estimate 40% of U.S. adults obesity. Analysts predict that the global weight-loss drug market could be worth $100 billion by around 2030.

Versanis’ drug, bimagrumab, binds directly to certain cells in the body to reduce fat mass.

The company is studying bimagrumab in a phase 2 trial in overweight or obese adults, and another comparing the therapy with Novo Nordisk’s Wegovy and Ozempic.

Bimagrumab works differently than Novo Nordisk’s drug and similar treatments from Indianapolis-based Eli Lilly and Company. These drugs, known as GLP-1 agonists, mimic hormones called incretins produced in the gut to suppress a person’s appetite.

But combining bimagrumab with these incretin-based therapies may lead to better outcomes for people with obesity and cardiometabolic diseases, including diabetes, kidney disease and conditions that affect the heart, Versanis said.

Eli Lilly is working on several obesity treatments.

The company’s experimental once-weekly injection of retartrutide helped overweight or obese patients lose 24% of their body weight after 48 weeks.

This exceeds the weight loss associated with other weight loss medications.

Eli Lilly’s experimental weight loss drug forforglipron also helped overweight or obese patients lose 14.7% of their body weight after 36 weeks.

The company is also pushing for approval of its type 2 diabetes drug Mounjaro for obesity.

Correction: Versanis’ drug bimagrumab binds directly to certain cells in the body to reduce fat mass. An earlier version misspelled the name of the drug.