COPENHAGEN: Danish drugmaker Novo Nordisk will acquire U.S.-based Akero Therapeutics (AKRO.O) for up to $5.2 billion, gaining a promising liver disease treatment in the first major deal by its new chief executive to bolster its pipeline.
The acquisition of Akero and its lead drug candidate, efruxifermin, underscores CEO Mike Doustdar’s strategy to focus on highly effective obesity and diabetes treatments that can also address related conditions. Doustdar, who took the helm in July, is tasked with stemming market share losses to U.S. rival Eli Lilly (LLY.N).
“We view this deal, coupled with recent internal restructuring at Novo, positively as Doustdar works to bring the ship back on course,” said BMO Capital analyst Evan Seigerman.
The deal for Akero represents a significant step-up in deal size for Novo, which has typically spent between $1 billion and $2 billion on recent biotech acquisitions in metabolic diseases.
Efruxifermin is in late-stage trials for metabolic dysfunction-associated steatohepatitis (MASH), a serious liver disease affecting about 5% of U.S. adults. The drug has shown potential in earlier studies to reverse liver scarring.
Doustdar called the candidate “an important building block” for future growth, particularly as Novo prepares for the loss of exclusivity on semaglutide, the active ingredient in its blockbuster weight-loss drug Wegovy, starting in 2025 in some markets.
The acquisition was welcomed by some investors. “It is encouraging to see Novo seal a major deal and expand in a high-growth area,” said Lukas Leu, a portfolio manager at Novo shareholder ATG Healthcare, noting rivals Roche (ROG.S) and GSK (GSK.L) have also recently moved into the MASH space.
In August, Wegovy became the first GLP-1 drug to receive an accelerated U.S. approval for MASH. Novo has since discontinued its own in-house MASH candidate, zalfermin.
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Under the terms of the deal, Novo will pay $54 per share in cash upfront, a 16.2% premium to Akero’s last closing price, for a total of about $4.7 billion. An additional payment of $6 per share is contingent on efruxifermin receiving full U.S. approval by June 2031.
Akero’s shares surged more than 16% in afternoon trading following the announcement, while Novo’s shares dipped 1%.
Novo’s stock has risen 11% since Doustdar’s appointment but remains down nearly 40% for the year, reflecting investor concerns over Wegovy’s U.S. prescription trends.
The company plans to finance the acquisition through debt and expects it to close by the end of the year.