Hengrui Medicine announced on September 29 that the company has signed a licensing agreement for Project HRS-1596 with Novo Nordisk. According to the agreement, Novo Nordisk will obtain the exclusive rights to develop, produce, and commercialize HRS-1596 globally, excluding the Greater China region.
According to the announcement, this transaction includes a down payment of $300 million, as well as milestone payments for development, registration, and commercialization amounting to up to $2.3 billion, with a potential total transaction value of up to $2.6 billion. In addition, Hengrui will also collect sales commissions based on the net sales within the authorized region, as indicated by HRS-1596.
After the announcement of the news, the stock price of Hengrui Medicine soared, with an increase of over 5% at one point.
HRS-1596 is still in the early clinical stage.
HRS-1596 is a dual receptor agonist independently developed by Hengrui, namely GLP-1 / GIP. It aims to achieve weight loss and blood sugar control through multiple mechanisms such as suppressing appetite, promoting insulin secretion, and improving insulin sensitivity. It has the potential to be used for obesity, type 2 diabetes and other metabolic diseases.
The core differentiating advantage of this product lies in its method of administration. The announcement states that HRS-1596 is expected to enable once-weekly oral administration, which can significantly reduce the frequency of medication and improve patient compliance compared to the existing injectable formulations.
Currently, Hengrui has been approved in China to conduct Phase I clinical trials of HRS-1596 for weight management and type 2 diabetes, and the product is still in the early stages of development.
Hengrui mentioned in the announcement that the process from drug development, clinical trial approval to production involves a long cycle and multiple stages. There is uncertainty as to whether HRS-1596 will ultimately be approved for marketing overseas. The milestone payments stipulated in the agreement also need to meet corresponding conditions, and the final amount remains subject to change.
Down payment of $300 million, with delivery expected to be completed in the fourth quarter of 2026.
From a financial perspective, the initial payment of $300 million represents the most certain benefit in this transaction, while the remaining milestone payments of up to $2.3 billion are linked to subsequent development, registration, and commercialization progress. The sales commission will be calculated separately based on the actual net sales of HRS-1596 within the authorized region.
The agreement is subject to the laws of New York State, USA, and must be approved by the relevant regulatory authorities in accordance with the U.S. Hart-Scott-Rodino Antitrust Improvement Act, while also meeting other customary delivery conditions. Hengrui expects that the transaction will be completed in the fourth quarter of 2026.
It is worth noting that Hengrui retains all rights for HRS-1596 in the Greater China region (Mainland China, Hong Kong, Macau, and Taiwan), with the authorization scope covering only global markets outside of the Greater China region.
The announcement states that Hengrui insists on giving equal importance to independent research and development as well as open cooperation. This collaboration aims to leverage international leading partners to cover overseas markets, accelerate integration into the global drug innovation network, and maximize the value of its products.
