(Yicai) July 31 -- CSPC Pharmaceutical Group has granted Madrigal Pharmaceuticals exclusive global rights to a preclinical oral small molecule glucagon-like peptide-1 weight-loss drug and orforglipron derivative. The deal could be worth over USD2.1 billion.

Madrigal can develop, manufacture, and commercialize SYH2086 worldwide, while CSPC retains rights to make other oral GLP-1 agonists in China, the Pennsylvania-based company announced yesterday. The agreement is expected to be completed in the fourth quarter of this year, subject to regulatory clearance.

Under the deal, Madrigal will make an upfront payment of USD120 million, followed by milestone payments plus sale royalties of as much as USD2 billion.

SYH2086 is an oral alternative to GLP-1 jabs such as Ozempic and Wegovy, aiming to improve patient convenience and compliance.

Madrigal plans to combine SYH2086 with its Food and Drug Administration-approved liver disease treatment Rezdiffra to make a once-a-day oral therapy for metabolic dysfunction-associated steatohepatitis. The combination leverages the weight loss benefits of GLP-1 with Rezdiffra's fibrosis reduction capabilities.

"This agreement to acquire global rights to SYH2086 aligns perfectly with our long-term goal to extend our leadership in MASH by building a pipeline anchored by Rezdiffra," said Bill Sibold, chief executive of Madrigal. "We believe a combination of Rezdiffra and SYH2086 has the potential to deliver a best-in-class oral treatment for patients with MASH."

According to clinical data from Rezdiffra's pivotal trial, even modest 5 percent weight loss enhanced the drug's anti-fibrotic benefits, providing a strong rationale for the combination approach.

Preclinical data for SYH2086 have shown excellent agonistic activity and favorable pharmacokinetic properties across multiple animal species without significant safety concerns. The compound exhibited linear pharmacokinetics over a wide dose range, supporting its potential for clinical development, with Madrigal planning to start that in the first half of next year.

The deal is the latest global validation of Chinese pharmaceutical innovation, particularly novel small molecule drugs, with companies increasingly willing to pay substantial upfront fees for preclinical Chinese assets.

CSPC previously granted AstraZeneca the right to a small molecule lipoprotein(a) cardiovascular therapy, while Hansoh Pharma recently licensed its preclinical GLP-1 candidate to Merck.

Shares of Hebei province-based CSPC (HKG: 1093) fell 1.3 percent to HKD9.97 (USD1.27) each as of 3.50 p.m. in Hong Kong today.

Editor: Martin Kadiev