Pfizer has secured up to $1.5 billion from Blackstone Life Sciences to fund development of its monthly GLP-1 receptor agonist.
The drug candidate, berobenatide, is the focus of a broad clinical development program. Racing to close the gap on Eli Lilly and Novo, Pfizer has embarked on a 10-trial phase 3 program for the asset, which it acquired in its $9.8 billion takeover of Metsera. The company began the first of the 10 trials of the asset, formerly called MET 097i, in December and aims to launch the product in 2028.
Having bet big on berobenatide, Pfizer has turned to Blackstone for financial support. Blackstone will pay up to $1.5 billion of the drug candidate's development costs through 2028. In return, the investor could receive milestones tied to the U.S. approval of monthly monotherapy berobenatide for chronic weight management and the achievement of commercial sales targets.
The agreement is “a modest positive for Pfizer,” BMO Capital Markets analysts concluded in a note to investors. BMO analysts like the deal structure, explaining that it “meaningfully offsets near-term development spending” as Pfizer prepares for the loss of exclusivity on key products.
“In our view, the timing is attractive given the cash-flow pressure associated with Pfizer’s approaching patent-expiration cycle and allows the company to preserve financial flexibility while continuing to invest behind what has emerged as a potentially important obesity franchise,” the analysts said.
Pfizer has secured support for berobenatide development as the asset contributes to rising R&D costs. Adjusted R&D expenses increased (PDF) 18% operationally in the third quarter as Pfizer invested in priority oncology and obesity programs. The company added $300 million to both ends of its forecast full-year R&D spending range this month.
Drugmakers, including Pfizer, have repeatedly turned to Blackstone to partly move the cost of advancing drug candidates off their books. Last year, Pfizer partnered with the asset management firm to receive up to $326 million through 2028 to co-fund development costs for specified treatments.
One year ago, Merck & Co. tapped Blackstone for up to $700 million to test sacituzumab tirumotecan, its TROP2-directed antibody-drug conjugate. In February, Johnson & Johnson secured funding for an acute myeloid leukemia drug candidate, bleximenib. Blackstone’s support extends to biotech and medtech, with Apogee Therapeutics securing up to $1.3 billion and Boston Scientific inking a $455 million deal.
The Pfizer agreement positions Blackstone to earn milestones over a multi-year period. Pfizer retains full operational control and decision-making for the berobenatide program. Neither party has disclosed the size of the milestones, making it hard to quantify the impact on Pfizer’s “longer-term cash generation if berobenatide becomes a successful commercial product,” BMO analysts pointed out.
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