AbbVie (ABBV.US) announces acquisition of Gubra's new drug for up to $2.2 billion, entering the weight loss drug market.

According to the Wise Wealth APP, American pharmaceutical company AbbVie (ABBV.US) has agreed to acquire the next generation weight loss drug from Danish biotechnology company Gubra A/S for as much as $2.2 billion, signaling the company's entry into the competitive weight loss drug market. The licensing agreement will pit AbbVie against Eli Lilly and Company and Novo Nordisk A/S Sponsored ADR Class B, both of which currently lead the weight loss drug market. Sales in this market are expected to reach $130 billion by 2030. AbbVie has agreed to pay Gubra a $350 million upfront payment, plus up to $1.88 billion in development and commercial milestone payments, as well as royalties. Gubra's experimental drug GUBamy mimics amylin, a gut hormone different from GLP-1, which has seen great success with Novo Nordisk A/S Sponsored ADR Class B and Eli Lilly's GLP-1 drugs. Bloomberg Intelligence analyst John Murphy said that competition in the amylin field may not be as intense, which could explain why AbbVie is paying a "substantial upfront payment" for the deal. Gubra's stock price surged 29% at one point, marking its largest gain since November. The company's stock has more than doubled in the past year due to optimism about its weight loss product portfolio. AbbVie hopes to offset declining revenues from its blockbuster drug Humira with new drugs. Humira, a treatment for arthritis, was once the world's best-selling drug. However, AbbVie may still face challenges, as early data on Gubra's drug suggest its efficacy may be on par with that of Zealand Pharma A/S's drug. However, Zealand's drug petrelintide is "at least a year ahead on the timeline." Analysts at Van Lanschot Kempen led by Suzanne Van Voorthuizen say that the Gubra deal "sets a reference point for a potential deal on Zealand's petrelintide." The team noted that the terms of the deal are higher than expected.