Wegovy Maker Novo Nordisk Buys Embark Biotech to Boost Edge in Weight Loss Treatments

By
Fatima Attarwala
Fatima Attarwala
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Fatima Attarwala is a business news writer and editor with a decade of experience researching, analyzing, and commenting on issues influencing the economy.
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Published August 30, 2023
11:31 AM EDT
Injection pen parts at the Novo Nordisk A/S production facilities in Hillerod, Denmark

Bloomberg / Contributor / Getty Images

Wegovy maker Novo Nordisk (NVO) agreed to buy Embark Biotech for €15 million ($16 million) in cash upfront, in a move that could boost Novo Nordisk's portfolio of weight loss treatments. In addition, Embark shareholders could receive up to €456 million ($500 million), depending on whether certain commercial milestones are reached.

KEY TAKEAWAYS

  • Novo Nordisk is acquiring Embark Biotech to develop new weight loss treatments.
  • Embark shareholders will receive $16 million in cash upfront, with a potential payout of up to $500 million depending on whether commercial milestones are reached.
  • The obesity treatment market is expected to grow to $54 billion by 2030, according to Morgan Stanley Research.

The companies said a three-year collaboration to research and develop new treatments for obesity and related conditions will also give Novo Nordisk the option to acquire assets based on discoveries by Embark Biotech.

In 2014, a team of scientists from the Novo Nordisk Foundation Center for Basic Metabolic Research (CBMR) at the University of Copenhagen made discoveries that supported hunger suppression, calorie burning, and increased insulin sensitivity. They filed a patent, and Embark Biotech was spun out of CBMR. Its success in research led to the current deal.

"We are excited about the opportunity to advance Embark Biotech's lead program and look forward to co-creating novel treatments for cardiometabolic diseases with Embark Laboratories to complement our in-house R&D," said Novo Nordisk's vice president of obesity research, Brian Finan, in a release.

The market for obesity drugs is expected to grow to $54 billion by 2030, up from $2.4 billion in 2022, according to Morgan Stanley Research. Globally, around 650 million people are clinically obese, of which only about 7% are diagnosed and recommended for medical treatment.

American depositary receipts (ADRs) of Novo Nordisk dipped about 0.7% in early trading on Wednesday but remained more than 40% higher for the year.

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Article Sources
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  1. Embark Laboratories. "Embark Biotech has been acquired by Novo Nordisk."

  2. Embark Laboratories. "Embark Biotech has been acquired by Novo Nordisk."

  3. BII. "First exit in BII’s history: Novo Nordisk acquires Embark Biotech."

  4. University of Copenhagen. "Novo Nordisk buys CBMR biotech spinout to acquire their novel approach for treating obesity and type 2 diabetes."

  5. Morgan Stanley. "Why Obesity Drugs May Be a New Blockbuster Pharma Category."

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