After AstraZeneca (AZN) announced plans to invest up to $2.01 billion to license an experimental weight-loss drug from Eccogene, shares of AZN stock surged on Thursday.
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This news followed Eli Lilly (LLY)’s approval of a competitor to Novo Nordisk’s (NVO) Wegovy, called Zepbound, which is designed to target a gut hormone called GLP-1 to improve feelings of satiety and blood sugar markers, as well as regulate stomach emptying. AstraZeneca had previously faced setbacks in its GLP-1 program but is still testing a weight-loss drug targeting a different mechanism.
Now, AstraZeneca is turning to Eccogene’s ECC5004, a drug being tested for obesity, type 2 diabetes, and other cardiometabolic conditions. AstraZeneca’s licensing agreement with Eccogene involves an upfront payment of $185 million and future potential milestone payments of up to $1.825 billion. Eccogene may also receive royalties. AstraZeneca has exclusive rights to develop ECC5004 globally, except in China, where it will work with Eccogene.
Additionally, in morning trading, AZN stock jumped 2.8% to approximately 62.60.
AZN Stock: Mixed Quarterly Report
AstraZeneca reported mixed third-quarter results on Thursday, with total sales of $11.49 billion, slightly below analysts’ forecasts. Nonetheless, sales were up 4%, and profit declined by 16%, though it still exceeded analyst estimates. The company also raised its outlook for sales and core earnings, anticipating a mid-single-digit percentage increase in revenue and a low double-digit to low-teens rise in core earnings.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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