By Dominic Chopping

Danish pharmaceutical giant Novo Nordisk and U.S. biotech Septerna agreed to collaborate on the development of pills to treat obesity, type 2 diabetes and other metabolic conditions.

Under the terms of the agreement, Septerna is eligible to receive around $2.2 billion from Novo Nordisk, including more than $200 million in upfront and near-term milestone payments.

The U.S. company will also receive research, development and commercial milestone payments, on top of tiered royalties on global net sales of marketed products. Novo Nordisk will cover all research-and-development costs.

In premarket trading, Septerna shares were up 69%, while Novo Nordisk shares were up 1.2% in afternoon European trading.

The U.S. biotech has developed a platform that allows the discovery and development of drugs targeting G protein-coupled receptors, or GPCR, a protein found around cells that allows chemicals to pass inside.

Blockbuster obesity drugs currently on the market from Novo Nordisk and Eli Lilly both work by targeting GPCRs. In Novo Nordisk's case, its Wegovy treatment targets a GPCR known as GLP-1, while Lilly's Zepbound targets both GLP-1 and GIP.

Hundreds of different GPCRs regulate physiological processes in nearly every organ system of the human body, Novo Nordisk said. The area has been the most productive target class in drug discovery history, accounting for approximately one-third of all FDA-approved drugs, it said.

However, around 75% of potential GPCR therapeutic targets are yet to be targeted, representing a substantial opportunity for future drug discovery, it said.

Novo Nordisk and Septerna will seek to discover, develop and commercialize oral small molecule medicines, initially starting four development programs focused on GPCR targets including GLP-1, GIP and glucagon.

The Danish company's chief scientific officer, Marcus Schindler, said the collaboration would offer important options in its pipeline in terms of potential targets, dosing regimens and scalability.

"Septerna has demonstrated strong capabilities in GPCR drug discovery, and we are excited about the opportunity to develop oral small molecule medicines directed at multiple targets."

Novo Nordisk and Eli Lilly currently dominate the weight-loss market, but their drugs are administered by injection. Both are working on pill versions that are seen as more convenient for patients to take, as well as easier to transport and store as they don't require refrigeration.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

May 14, 2025 08:24 ET (12:24 GMT)

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