By Kate Goodwin

Novo Nordisk has again bought a weight-loss focused biotech, as the obesity market heats up. Announced Wednesday, the Danish pharma plans to buy Embark Biotech for $16.3 million up front with close to $500 million on the line in milestone payments—Novo’s second obesity-focused acquisition in three weeks.
Novo participated in the seed round for Embark in 2017 when the biotech spun out from Novo Nordisk Foundation Center for Basic Metabolic Research at the University of Copenhagen. The company said it was founded on the discovery of a “novel target that suppresses appetite increases energy expenditure and enhances insulin sensitivity.”
The acquisition announced Wednesday gives Novo full rights to develop and commercialize Embark Biotech’s lead metabolic program, currently in preclinical stages. Included is a three-year R&D collaboration with Embark Laboratories, a new company being formed by the biotech’s team to develop therapies for obesity and related conditions, with an option to acquire assets discovered during the timeframe.
“Novo Nordisk has been engaged in obesity research for 25 years, and we continuously search for new ways to address this serious chronic disease,” Brian Finan, Novo’s vice president of obesity research, said in a statement.
Earlier this month, Novo announced it was putting over $1 billion on the line for Canadian biotech Inversago Pharma. A breakdown of upfront versus milestone payments was not disclosed at the time, but the buy is expected to close by end of year.
Inversago’s novel CB1 receptor-based therapies “could lead to life-changing new treatment options for those living with a serious chronic disease and, in particular, may offer alternative or complementary solutions for people living with obesity,” according to the announcement. Its lead asset has already presented Phase Ib data showing significant progressive weight loss in adults with signs of metabolic syndrome.
Novo posted record sales over $1.1 billion in the second quarter of 2023 for its weight-loss drug, Wegovy, with competition heating up. Recent late-stage studies for Eli Lilly’s GLP-1 showed average weight loss of about 26% in participants on tirzepatide.
Lilly is also upping its M&A game, acquiring Versanis Bio to beef up its obesity offerings. Versanis has a monoclonal antibody in the pipeline that aims to reduce fat mass without affecting muscle mass. Lilly will pay up to nearly $1.93 billion for the deal, depending on milestones that are met.
The mAb was originally developed by Novartis as a treatment for muscle disorders, then licensed out to Versanis in 2021.
Novo has also been working to strengthen its stronghold for Wegovy by proving heart health benefits. Recent Phase III trials showed Wegovy helps patients with a common type of heart failure, while another trial demonstrated the injections significantly reduced major adverse cardiovascular events in overweight and obese adults without diabetes.
With obesity considered a global epidemic by the World Health Organization, pharma companies are looking to take advantage of this lucrative market.