Novo Nordisk (NVO) announced a new $2.2 billion deal with San Francisco-based biotech Septerna (SEPN) for obesity pills — the latest in a series of moves by the Danish drugmaker as it hopes to maintain its position as one of two leaders in the hot obesity market.

Novo Nordisk said Wednesday that the company agreed to an exclusive collaboration and licensing agreement for "oral small molecules for obesity, Type 2 diabetes and other cardio-metabolic diseases," which are all the areas the current GLP-1 drugs address.

Septerna's stock was up 64% in premarket trading on Wednesday, and dropped to 48% after trading began. Novo Nordisk's stock traded up a little over 1%.

Read more about Novo Nordisk's stock moves and today's market action.

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The deal is the latest in a series focused on the pill market for obesity, deemed the next frontier in the race for the next generation of weight-loss drugs. Novo Nordisk already has an oral version of its top weight-loss injectable, Wegovy, awaiting FDA approval. It could see a decision from the FDA by the end of this year.

Investors have been watching Novo Nordisk's moves closely as Wegovy has begun to lose ground, based on prescription data, to competitor Eli Lilly's (LLY) Zepbound.

Novo also recently announced a $1.75 billion deal with Lexicon (LXRX) for an oral obesity treatment currently in development.Photo illustration of Wegovy and a weight scale. (Michael Siluk/UCG/Universal Images Group via Getty Images)·UCG via Getty Images

In addition to the deals for pills, the company has secured deals to help boost access to its drugs, notably a deal with CVS (CVS) to be the exclusive drug on its formulary for obesity and deals with telehealth companies like Hims & Hers (HIMS) to help reach patients willing to pay cash. The deal with CVS also includes a cash pay option for $499 per month, about half the list price of the drug.

The deal with Septerna puts the biotech in charge through the early discovery and dosing phase. Once a lead option is chosen, Novo Nordisk will take over production and development. Septerna will receive $195 million upfront and up to $500 million additional for each of its four current pill candidates if they make it through early trials.

JPM analysts said in a note to clients that the move was a clear boost for Septerna. The biotech had faced some setbacks in other drug candidates and, as of last year-end, had $421 million in cash on hand, which would help support its operations into 2028.

"We view this morning's pre-market move (+70%) as appropriate and remain bullish on the potential for Septerna's platform to deliver value through small molecule solutions," the analysts said Wednesday.

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Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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