Eli Lilly and Company, Pharmaceutical company headquarters in Alcobendas, Madrid, Spain.

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Eli Lilly on Friday said it will acquire Versanis, a privately held obesity drug maker, for up to $1.93 billion to boost the pharmaceutical giant’s weight loss treatment portfolio. 

Eli Lilly agreed to pay Versanis shareholders in cash, which will consist of an upfront payment and potentially subsequent payments if Versanis achieves certain “development and sales milestones.”

Oakland, California-based Versanis, which was founded in 2021 by biotech investment firm Aditum Bio, has one experimental drug for obesity and potentially other conditions.

Eli Lilly’s stock price rose 3% on Friday following the announcement.

The deal is Eli Lilly’s latest attempt to capitalize on the weight loss industry gold rush, which began last year after Novo Nordisk’s blockbuster injections Wegovy and Ozempic boomed in popularity. 

An estimated 40% of U.S. adults are obese. Analysts project that the global weight loss drug market could be worth $100 billion by around 2030. 

Versanis’s drug, bimagrumab, binds directly to certain cells in the body to reduce fat mass.

The company is studying bimagrumab in a phase two trial in adults who are overweight or obese, and in another trial that compares the treatment with Novo Nordisk’s Wegovy and Ozempic.

Bimagrumab works differently from Novo Nordisk’s drugs and similar treatments from Indianapolis-based Eli Lilly. Those drugs, known as GLP-1 agonists, mimic hormones produced in the gut called incretins to suppress a person’s appetite.

But Versanis said combining bimagrumab with those incretin-based therapies could potentially lead to better outcomes for people living with obesity and cardiometabolic conditions, which includes diabetes, kidney disease and disorders affecting the heart. 

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Eli Lilly is working on several obesity treatments. 

The company’s once-weekly experimental injection, retatrutide, helped overweight or obese patients lose up to 24% of their weight after 48 weeks.

That surpasses the weight reduction caused by other obesity drugs.

Eli Lilly’s experimental obesity pill, orforglipron, also helped overweight or obese patients lose up to 14.7% of their body weight after 36 weeks.

The company is also pushing to approve its type 2 diabetes treatment, Mounjaro, for obesity. 

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