From AstraZeneca to Novo, investment in biotech continues

Investment in the biotech sector shows no sign of slowing down: in addition to the 69 deals totalling $198.6 billion (as recorded by BioBucks), two new transactions were announced this week by AstraZeneca and Novo Nordisk. Specifically, this year’s deals have involved 27 listed companies and 42 private companies.

The Anglo-Swedish group has finalised an agreement to invest $2 billion in the US-based Summit Therapeutics and to collaborate on the development of a new cancer drug, which could be combined with other treatments from the European pharmaceutical company. The equity investment will help accelerate the development of ivonescimab, Summit’s experimental drug, a bispecific antibody designed to target cancer cells more effectively and prevent their proliferation. The drug acts on two proteins, known as PD-1 and VEGF.

The Danish company, meanwhile, has announced an investment of up to $2.6 billion to secure the rights to an experimental anti-obesity pill from China’s Jiangsu Hengrui Pharmaceuticals, thereby expanding its pipeline through a second agreement in the GLP-1 treatment sector with a Chinese partner. The deal highlights the rapid growth of the Chinese industry involved in the development of GLP-1 drugs, which aims to capture a larger share of a rapidly expanding market that, according to analysts’ estimates, could generate annual sales of around $100 billion globally over the next decade.

Other major pharmaceutical companies are also making moves in the field of anti-obesity drugs, such as Eli Lilly, whose trials in this area have yielded positive results: the US-based group has stated that its oral anti-obesity drug, Foundayo, leads to greater weight loss and better blood glucose control than Novo Nordisk’s Ozempic tablet at a higher dose, in adults with type 2 diabetes, citing data from studies already conducted. The Ozempic pill contains semaglutide, the same active ingredient as Novo’s blockbuster weight-loss drug, Wegovy. Both drugs belong to the popular class of GLP-1 treatments, which help regulate blood sugar levels and reduce appetite.

Industrial strategies that have an immediate impact on companies’ share prices. On Wednesday 29 September, AstraZeneca, after opening more than one and a half percentage points higher, retreated to close trading on the London Stock Exchange almost flat (+0.26%) at 12,526 pence per share. In contrast, Summit Therapeutics celebrated the news by surging by over 8 per cent in early trading on the Nasdaq index. Novo Nordisk, a far cry from its market highs of June 2024, recorded a minimal fall of 0.24 per cent, whilst Jiangsu Hengrui Pharmaceuticals rose by 2.6 per cent on the Shanghai Stock Exchange. Finally, Eli Lilly’s trial results failed to impress the market, and its shares, after an initial attempt to rise, ended up falling. It is true, however, that Lilly itself has been one of the sector’s best-performing stocks since the start of the year, with a gain of just under 9 per cent against a backdrop of predominantly negative performance.