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Verdiva Bio has raised more than $410mn in one of the biggest initial funding rounds in the biotech sector, as it seeks to develop drugs discovered in China to compete with Eli Lilly and Novo Nordisk in the growing obesity market.
The Series A funding round by the start-up, co-founded by executives of Aiolos Bio, the biotech that was sold to GSK last year for $1.4bn, was led by US firm General Atlantic and European life sciences investor Forbion.
Khurem Farooq, chief executive of London and San Francisco-based Verdiva, said the group had spent almost a year looking for the right drugs to address problems in the obesity market, such as how to scale up manufacturing and ensure access for more patients.
“There are huge issues in this sector,” he said. “Ultimately, the cost of treatments is ballooning. If we can provide access to patients at an appropriate sort of level, that makes it really viable . . . That makes us unique in the marketplace.”
The obesity market is estimated to reach $105bn by 2030, according to Morgan Stanley. Sales of branded obesity drugs totalled $6bn in 2023, according to the bank.
The sheer number of obese people means that US health insurers and European health systems have tried to restrict who qualifies for the drugs. Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound treatments have US list prices of more than $1,000 a month, although rebates mean the real cost is lower.
Verdiva Bio has acquired the rights to develop the drugs outside of China and South Korea from Chinese biotech Sciwind Biosciences, making it one of many western drugmakers hunting for potential medicines in the country.
The drugs include a potential obesity pill that would need to be taken just once a week. It uses a similar mechanism to Novo Nordisk’s Wegovy but is yet to be tested in phase 2 and 3 trials. Verdiva Bio also has the rights to two other drugs based on amylin, another hormone that scientists believe will be an effective appetite suppressant.
Verdiva Bio hopes the drugs will also provide an option for patients to maintain weight loss after using the existing treatments, by taking a pill. Mark Pruzanski, Verdiva Bio’s chair, said there was an “enormous opportunity” to treat the large majority of patients who stopped taking the injectables.
Novo Nordisk and Eli Lilly have been acquiring companies with obesity assets to shore up their pipelines for when their existing drugs lose patent protection. But Farooq said Verdiva Bio’s goal was not to be acquired, and would instead be able to use some of the money it raised to buy more assets.
“The goal is to build a long-term cardiometabolic company,” he said.
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