RAHWAY, N.J. - Merck (NS:PROR) & Co., Inc. (NYSE:MRK) and Hansoh Pharmaceutical (TADAWUL:2070) Group Company Limited have entered into an exclusive global license agreement for the development of HS-10535, a preclinical oral small molecule GLP-1 receptor agonist, with potential applications in cardiometabolic diseases. Under the terms of the agreement, Hansoh Pharma will receive an upfront payment of $112 million from Merck.
Merck will also potentially pay Hansoh up to $1.9 billion in milestone payments tied to the development, regulatory approval, and commercialization stages of HS-10535. Additionally, Hansoh Pharma is eligible for royalties on sales and may have the rights to co-promote or exclusively commercialize the drug in China under certain conditions.
Dr. Dean Y. Li, president of Merck Research Laboratories, expressed the company's intention to leverage their experience in incretin biology to explore the benefits of HS-10535 beyond weight reduction. Eliza Sun, Executive Director of the Board at Hansoh Pharma, highlighted the collaboration with Merck as a means to accelerate the development of HS-10535 for patients globally.
The financial implications for Merck include a pre-tax charge of $112 million, which will be reflected in both GAAP and non-GAAP results for the fourth quarter of 2024, equating to a $0.04 impact per share. According to InvestingPro data, Merck maintains a healthy financial position with a 76.6% gross profit margin and is currently trading near its 52-week low, suggesting potential value opportunity. InvestingPro's comprehensive analysis, including detailed Fair Value estimates and 12 additional ProTips, is available for subscribers.
Both companies have a significant presence in the pharmaceutical industry. Hansoh Pharma is recognized for its commitment to treating major diseases, including metabolic diseases, and has been listed on the Hong Kong Stock Exchange since June 2019. Merck, with a history spanning over 130 years, aims to be the premier research-intensive biopharmaceutical company, focusing on innovative health solutions. The company has demonstrated consistent growth with revenue increasing 6.5% over the last twelve months and maintains a solid 3.24% dividend yield. For deeper insights into Merck's financial health and growth prospects, access the full Pro Research Report available on InvestingPro.
The agreement is subject to the usual risks and uncertainties associated with pharmaceutical development, and there are no guarantees that HS-10535 will receive regulatory approval or become commercially successful. This news is based on a press release statement from Merck & Co., Inc.
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