Kailera Therapeutics Files for Nasdaq IPO with $6B-Valued GLP-1 Portfolio Licensed from Hengrui Medicine

May 16,Hengrui Pharma Announces Licensing of Its Proprietary GLP-1 Product Portfolio to Hercules CM Newco, Inc. (“U.S. Hercules”)Hercules will obtain exclusive global rights, excluding the Greater China region, to develop, manufacture, and commercialize the GLP-1 product portfolio. As part of the consideration for this out-licensing transaction, Hengrui Pharma will acquire a 19.9% equity stake in Hercules and receive licensing fees for the GLP-1 product portfolio from Hercules.

Under the terms of the agreement, Hengrui Pharma will receive an upfront payment and near-term milestone payments totaling $110 million, up to $200 million in cumulative clinical development and regulatory milestones, up to $5.725 billion in cumulative sales milestones, and low single-digit to low double-digit tiered royalties on net sales, bringing the total potential deal value to $6.035 billion.According to incomplete statistics, this transaction has set a new record for overseas licensing deals, becoming the highest-value transaction in pharmaceutical companies’ overseas business development (BD) collaborations in 2024.

The GLP-1 product portfolio in this transaction comprises innovative drugs independently developed by Hengrui Pharma for the treatment of diabetes, obesity, and other metabolic diseases.including the small-molecule GLP-1 receptor agonist HRS-7535, injectable and oral formulations of the peptide dual GLP-1/GIP receptor agonist HRS9531, and the next-generation incretin product HRS-4729。

Among them, HRS-7535 tablets are a novel oral small-molecule glucagon-like peptide-1 receptor (GLP-1R) agonist. It can be used to treat type 2 diabetes mellitus (T2DM) and for weight reduction through mechanisms such as activating human GLP-1R to promote pancreatic insulin secretion, reduce glucagon secretion, and inhibit gastric emptying, as well as enhancing satiety and suppressing appetite via central effects to directly reduce energy intake. No oral small-molecule GLP-1R agonists have been marketed globally.

HRS9531 injection is a dual agonist targeting the glucose-dependent insulinotropic polypeptide receptor (GIPR) and glucagon-like peptide-1 receptor (GLP-1R), independently developed by Hengrui Pharma. It synergistically promotes insulin secretion, suppresses energy intake, and improves insulin sensitivity. By activating GIPR, it effectively accelerates lipid metabolism and reduces gastrointestinal adverse reactions associated with GLP-1, making it suitable for the treatment of type 2 diabetes mellitus (T2DM) and weight management. HRS9531 tablets are a novel oral dual GIPR and GLP-1R agonist with global independent intellectual property rights, using HRS9531 as the main active ingredient. This formulation enhances the gastrointestinal absorption of HRS9531 in vivo and is indicated for the treatment of T2DM and weight management. No similar oral products have been marketed globally.

HRS-4729 injection, currently in the preclinical development stage, activates multiple targets to protect pancreatic islets while enhancing insulin secretion and controlling blood glucose levels. It is expected to achieve superior weight loss effects and provide therapeutic benefits for metabolic dysfunction-associated diseases. To date, approximately RMB 13.79 million has been invested in its research and development. No similar products have been marketed globally.

In May 2024, the U.S.-based Hercules company was co-founded with a joint investment of $400 million by prominent investment institutions, including Bain Capital Life Sciences, Atlas Ventures, RTW Investments, and Lyra Capital. The company’s scope of business and core operations focus on biopharmaceutical development. The investors will be responsible for the establishment and operation of Hercules.

Following the completion of this transaction, the shareholding structure of Hercules Inc. in the United States is as follows: (1) Bain Capital Life Sciences Fund contributed $225 million, holding a 39.4% equity stake; (2) RTW Investments contributed $110 million, holding a 19.3% equity stake; (3) Atlas Ventures contributed $50 million, holding an 8.8% equity stake; (4) Sinovestment contributed $15 million, holding a 2.6% equity stake; (5) Hengrui Pharma holds a 19.9% equity stake; and (6) the Employee Stock Ownership Plan (ESOP) holds a 10% equity stake.

Hengrui Pharma will also establish a Joint Steering Committee with U.S.-based Hercules to coordinate the global development and commercialization of the licensed products, with each party appointing three representatives to the committee.

Upon completion of the transaction, in addition to subsequent milestone payments and sales royalties, Hengrui Pharma will also be entitled to a 19.9% equity interest in the product value as a shareholder, representing a new model of co-development. Dr. Jiang Ningjun, Director and Chief Strategy Officer of Hengrui Pharma, stated in the press release, “Partnering with top-tier investment funds such as Bain Capital, Atlas Ventures, RTW Investments, and Lyra Capital represents a new strategic model for Hengrui Pharma, helping to further broaden the internationalization pathway of its robust innovative pipeline and better address unmet medical needs worldwide.”。

Hengrui Pharma had already secured multiple licensing deals prior to this. For instance, in August 2023, Hengrui Pharma announced that it had licensed the ex-Greater China rights to its TSLP monoclonal antibody to One Bio (Aiolos Bio), receiving an upfront payment of $25 million and potential milestone payments of up to $1.025 billion. In January 2024, Aiolos Bio announced its acquisition by GSK for an upfront payment of $1 billion and milestone payments of up to $400 million.

According to data released by Hengrui Pharma,The company secured five licensing deals with a total transaction value exceeding $4 billion in 2023 alone., Among the 11 innovative drugs that have currently achieved overseas licensing, BD collaborations have been secured for the JAK1 inhibitor SHR0302, the TSLP monoclonal antibody SHR-1905, and the GLP-1 product portfolio, covering therapeutic areas such as autoimmune diseases, respiratory system disorders, and metabolic diseases.