TLDR
- Novo Nordisk will pay up to $2.6 billion to license an experimental obesity pill from China’s Jiangsu Hengrui Pharmaceuticals.
- The deal includes a $300 million upfront payment plus up to $2.3 billion in future milestone payments.
- The drug, HRS-1596, is a GLP-1/GIP dual receptor pill built for once-weekly dosing.
- Novo’s stock has fallen more than 70% from its record high as Eli Lilly gains ground in the weight-loss market.
- Hengrui’s Hong Kong-listed stock rose about 2% after the announcement.
Novo Nordisk’s stock has dropped more than 70% from its record high as Eli Lilly chips away at its lead in weight-loss drugs. On Tuesday, the company made its latest move to change that story.
The Danish drugmaker agreed to pay up to $2.6 billion for the rights to an experimental obesity pill from China’s Jiangsu Hengrui Pharmaceuticals. It’s Novo’s second GLP-1 licensing deal with a Chinese partner this year.
The agreement gives Novo global rights to a drug called HRS-1596, outside of mainland China, Hong Kong, Macao and Taiwan. Hengrui keeps those markets for itself.
HRS-1596 is a GLP-1/GIP dual receptor drug still in early development. China has approved it for Phase 1 trials covering weight management and type 2 diabetes.
How the Payments Break Down
Hengrui will get $300 million upfront from Novo. The rest of the $2.6 billion comes from development, regulatory and sales milestones, plus royalties on future sales.
Novo said the pill could eventually be taken just once a week. That would mark a step up from its current daily options, including Wegovy.
CEO Mike Doustdar said earlier this month that pills will play a bigger role in weight-loss treatment going forward. This deal fits squarely into that plan.
A Novo spokesperson told Reuters the company plans global trials for the new drug. No timeline has been given yet.
Competition From Lilly and China
Novo is racing against Eli Lilly, whose daily pill Foundayo competes directly with Wegovy. That rivalry has weighed on Novo’s stock for months.
China has become a major source of new obesity drugs. Data provider Pharmcube counts almost 250 Chinese GLP-1 candidates currently in development.
Other large drugmakers have made similar moves. AstraZeneca, Merck and Pfizer have all licensed GLP-1 drugs from Chinese developers.
Novo already has one other deal with a Chinese company, United Laboratories International, for a drug called UBT251. In one trial, patients lost up to 19.7% of their body weight after 24 weeks.
The weight-loss drug market is expected to generate about $100 billion a year globally within the next decade. That prize is why so many companies keep signing these licensing deals.
Hengrui’s stock in Hong Kong rose about 2% after the deal was announced. That move stood out against the Hang Seng Index, which fell about 1% the same day.
The deal still needs to clear U.S. antitrust review along with other standard closing conditions. Novo and Hengrui expect it to close in the fourth quarter of 2026.
Lilly did not respond to a request for comment on whether it has made any similar licensing deals in China.
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