Splurge nearly 500 million US dollars, Pfizer Inc. (PFE.US) collaborates with a Chinese biotech company, increasing investment in the weight loss drug market in China.

American pharmaceutical giant Pfizer Inc. (PFE.US) has reached an agreement with local startup Hangzhou Xianwei Biotechnology Co., Ltd. to obtain exclusive commercialization rights for the latter's weight loss therapy in China, aiming to strengthen its presence in the high-growth weight loss market. According to a statement, the deal between the two parties involves the drug ecnoglutide. The drug recently received approval in China for the treatment of diabetes, and its indication for weight loss is currently under regulatory review. Xianwei Biotechnology stated that the total value of the deal could reach up to $495 million, including upfront payments and milestone-based payments, but specific details were not disclosed. Pfizer Inc. has been aggressively pursuing leaders in the field of weight loss drugs. The President of Pfizer Inc. China stated in the announcement that this collaboration "accelerates Pfizer Inc.'s long-term strategic layout in the field of metabolism to meet the growing needs of Chinese patients." He pointed out that obesity affects 14.1% of adults in China and has been listed as a priority in the government's "Healthy China" initiative. Pfizer Inc. is seeking to rebuild its business in the post-pandemic era. Facing more intense competition for many core products and setbacks in its initial attempts to enter the weight loss drug market, the company is under pressure to find new sources of revenue. The collaboration with Xianwei Biotechnology is expected to boost Pfizer Inc.'s business in China. It is understood that as of 2024, China accounts for 4% of Pfizer Inc.'s total revenue, but has undergone multiple rounds of restructuring in recent years. In the Chinese weight loss drug market, Pfizer Inc. will face challenges from global pharmaceutical giants and domestic competitors such as INNOVENT BIO. Xianwei's ecnoglutide works similarly to Novo Nordisk A/S Sponsored ADR Class B's semaglutide (Ozempic), both regulating blood sugar and suppressing appetite by simulating a natural hormone called glucagon-like peptide-1 (GLP-1). However, the company believes that slight structural differences in the drug make it more effective and safer than other GLP-1 receptor agonists. In a late-stage study, ecnoglutide achieved weight loss effects comparable to Eli Lilly's tirzepatide (Zepbound). Under the agreement with Pfizer Inc., Xianwei will remain responsible for the development, registration, production, and supply of the drug.