(Yicai) March 25 -- Chinese biotech firm United Laboratories International Holdings has granted exclusive global licensing rights for a new weight-loss drug to Novo Nordisk in a deal that could be worth as much as USD2 billion.

The deal gives the Danish drugmaker exclusive rights to develop, produce, and commercialize UBT251 worldwide, United Labs said in a statement yesterday. The Hong Kong-based company retains the rights in the Chinese mainland, Hong Kong, Macau, and Taiwan.

United Labs will receive an upfront payment of USD200 million from Novo Nordisk, potential milestone payments of as much as USD1.8 billion, and tiered royalties based on net sales.

UBT251 is in early clinical development for the treatment of obesity, type-II diabetes and other diseases, and was developed by United Biotechnology, a subsidiary of United Labs.

The drug has been approved in China for clinical trials in adults with type-II diabetes, the overweight or obese, metabolism-related fatty liver disease and chronic kidney disease. In the United States, it has been green-lighted for human trials in four indications other than MAFLD.

Competition is increasing in the weight-loss drug market, which is expected to be worth up to USD150 billion by 2030. Novo Nordisk makes Ozempic, one of the leading drugs in the market.

United Labs also released its annual earnings results today. Net profit fell 1.5 percent to CNY2.66 billion (USD367 million) in the 12 months ended Dec. 31, while operating income rose 0.1 percent to CNY13.76 billion (USD1.9 billion).

Net profit from the firm’s preparation products segment tumbled 47 percent, mainly because of price cuts and higher research and development costs resulting from China’s centralized drugs procurement program, it said.

Shares of United Labs [HKG: 3933] slumped 12 percent to close at HKD14.68 (USD2.02) each in Hong Kong. The stock is still 19 percent higher than it was at the end of last year.

Editor: Tom Litting