This Pharma Company Is Betting Big On A Chinese Ozempic Rival

Key Concepts:

• Obesity drugs, GLP-1 agonists, licensing deals, Chinese biotech innovation, clinical trials, pharmaceutical investment, drug development timeline, Phase 3 trials.

I. The Search for an Ompic Rival

• In the summer of 2023, Dr. Amir Zamani from Bane Capital was researching obesity drugs, specifically seeking a competitor to Novo Nordisk's Ompic and Eli Lilly's Zepbound.
• Ompic was projected to generate $14 billion in revenue that year.
• Zamani discovered promising early clinical data from Jang Su Hungrui Pharmaceuticals (Hungary), a Chinese pharmaceutical company.
• Hungary's injectable weight loss therapy targeted the GLP-1 hormone, similar to Ompic and Zepbound.
• Zamani stated, "It was like wait a second they're ahead of everybody else who's not Novo or Lily."

II. Clinical Trial Results and Potential

• Phase 2 clinical trials in China showed 59% of participants losing 20% or more of their body weight on an 8 mg dose over 36 weeks.
• Side effects were reported as mild.
• The drug could be beneficial for severely obese patients needing more significant weight loss than current medications allow.
• Hungary's portfolio included three other drugs, two of which were easier-to-administer pills.

III. Shift in Chinese Drug Development

• Historically, Chinese drug development focused on "meto" drugs for the local market.
• Over the past decade, with Beijing's focus on building a native biotech industry, US-trained Chinese scientists have returned to innovate.
• A Stifel analyst report in January noted that nearly one-third of molecules sourced by major pharmaceutical companies through licensing deals are now coming from China.
• American companies spent $8.1 billion on upfront payments for Chinese drugs between 2020 and 2024, compared to $536 million in the preceding 5 years, according to Bioarma Deals database.
• Jory Bell from Playground Global stated, "When new biology hits or new sets of targets become proven then suddenly everyone who wants one of those just goes shopping in China."

IV. Formation of Chilya Therapeutics

• Zamani partnered with Atlas Venture and RTW Investments.
• The three firms invested $400 million to launch Chilya Therapeutics in October.
• Chilya Therapeutics licensed four therapies from Hungary.
• The goal is to bring these therapies to market.

V. Market Opportunity and Growth

• Global sales of obesity drugs grew 50% last year to $36 billion.
• The market is projected to more than triple to $131 billion by 2028, according to Ivia Institute for Human Data Science.

VI. Leadership and Strategy

• Ron Renault, a former biotech stock analyst, was hired to run Chilera.
• Renault has a track record of building and selling biotech startups for significant profits (e.g., Identics, Translate Bio, Cerevil) totaling $16 billion.
• By licensing from China, Chilera skipped years of research and lab work.
• Renault plans to aggressively pursue Phase 3 clinical trials in the US for the lead drug.
• The goal is to bring the drug to market by 2030, which is considered fast in the drug development timeline.

VII. Conclusion

• Chilya Therapeutics is betting on a Chinese Ompic rival to capture a significant share of the rapidly growing obesity drug market. The company's strategy involves leveraging Chinese innovation, experienced leadership, and aggressive clinical development to bring a new GLP-1 agonist to market quickly.