Blackstone (BX.US) to inject up to US$1.5 billion, adding more ammunition to Pfizer Inc. (PFE.US)'s weight-loss drug race

Pfizer Inc. (PFE.US) announced on Wednesday that it has reached an agreement with Blackstone (BX.US) to secure up to US$1.5 billion in funding to support the development of its experimental monthly obesity treatment. According to statements released by both companies, a fund managed by Blackstone Life Sciences will cover up to US$1.5 billion of the drug's development costs through 2028. The drug is injectable berobenatide, which Pfizer Inc. is testing as a once-monthly weight-loss injection. In exchange for providing the funding, Blackstone will be eligible for milestone-linked payments but will not receive any rights or ownership in berobenatide. The companies did not immediately disclose the specific size of the milestone payments. The statement said the payments will depend on U.S. regulators approving injectable berobenatide as a once-monthly monotherapy for chronic weight management, and on the drug reaching certain commercial sales milestones. Pfizer Inc. said it will retain full control of the drug's development program and full ownership of the drug. It is understood that Pfizer Inc. obtained berobenatide last year through the acquisition of Metsera for up to US$10 billion. The acquisition was an arrangement near the end of a series of M&A deals by Pfizer Inc., aimed at offsetting revenue pressure from declining COVID product revenue and key drug patent expirations, and seeking to challenge industry leaders Eli Lilly (LLY.US.) and Novo Nordisk A/S Sponsored ADR Class B (NVO.US) in the weight-loss drug market. Pfizer Inc. currently has 10 ongoing or planned Phase 3 clinical trials for berobenatide and said it is studying developing the drug both as a monotherapy and in combination with other peptide drugs. Pfizer Inc.'s new Chief Financial Officer Cecile Guegan said in the statement that the company's goal is to combine internal research investment with targeted investment from capital partners in a disciplined manner while bringing important new medicines to patients. Pfizer Inc. said the deal will give it greater flexibility in pipeline investment across broader therapeutic areas and help advance its large obesity program while preserving resources for other therapeutic areas. Blackstone's involvement in drug development financing has been rising in recent years. In 2024, Blackstone reached an agreement to help fund trials of Moderna's (MRNA.US) flu vaccine, which was approved in the U.S. this summer. Pfizer Inc. has also previously engaged in similar cooperation with Blackstone: in April 2023, Pfizer Inc. signed an agreement with Blackstone to receive up to US$550 million in funding through this year to co-fund the development costs of certain therapeutic drugs.