Novo Nordisk expands AI partnership with Valo Health for development of obesity drugs

Danish drugmaker Novo Nordisk and US tech firm Valo Health said on Wednesday they were expanding their 2023 agreement to develop new treatments for cardiometabolic diseases using human data and artificial intelligence (AI).

WHY IT'S IMPORTANT

Last month Novo's drug candidate, CagriSema, showed weight loss below expectations during a trial, dealing a blow to the company's plans to soon introduce a successor to Wegovy, its popular weight-loss drug.

Novo is trying to develop a weight-loss treatment more powerful than Eli Lilly's rival Zepbound.

Both Novo and Lilly are also testing their blockbuster obesity drugs for a range of conditions as they race to show that they have other health benefits.

Analysts estimate the obesity drug market would be worth $150bn (R2.84-trillion) in the next decade.

CONTEXT

Novo and Valo originally partnered in September 2023 in an agreement to develop up to 11 drugs.

With the expanded agreement, Novo will collaborate with Valo to discover and develop up to 20 new treatments for obesity, type 2 diabetes, and cardiovascular diseases.

BY THE NUMBERS

Under the terms of the expanded agreement, Valo is entitled to receive near-term payments totalling up to $190m (R3.60bn) and milestone payments of about $4.6bn (R87.13bn).

In the original agreement, Valo was eligible to receive up to $2.7bn (R51.14bn) in milestone payments.