Obesity is pharma’s new El Dorado. Following the spectacular market success and sky-high sales projections of next-generation obesity treatments, many actors – both large and small – are looking to carve out a slice of this huge growth market. Those who made a bet on obesity years in advance are reaping the rewards, as seen by EraCal –named by PharmaBoardroom as one of its ‘Swiss Biotechs to Watch’ back in 2021 – recently sealing a deal to sell its obesity asset to market leader Novo Nordisk for EUR 235 million.
At Home in Switzerland
After working in biotech in the US and developing a zebrafish larvae platform at Harvard University, EraCal CEO and co-founder Josua Jordi returned to his native Switzerland, where he and co-founder Simon Breitler set up EraCal in Zurich in 2018.
“We evaluated various biotech hubs around the world and eventually selected Switzerland due to its founder-friendly mentality, supportive infrastructure and the fertile landscape for fundraising,” said Jordi in a 2021 PharmaBoardroom interview. “We considered Zurich to be an excellent fit for developing EraCal’s novel biologic mechanism to control appetite. There is simply much more margin for error here and the Swiss ecosystem truly has fantastic initiatives to push first-time entrepreneurs, not to mention the prospect of non-dilutive funding availability.”
Initial funding got the startup off the ground when it closed a CHF six million seed round in 2019, funds it then supplemented with roughly CHF two million in non-dilutive money from grants and awards.
A New Take on Obesity
EraCal began with the idea of tackling obesity, a disease with an enormous patient population, from a new angle. “We entered the obesity arena with a completely novel mindset,” Jordi asserted. “We intended to find a new biologic mechanism to control appetite.”
To do this, the biotech relied on its zebrafish larvae technology platform, a phenotypic drug discovery technology originating from the founder’s University of Zurich and Harvard University days. While not a completely unique approach to drug discovery as larval zebrafish fish had been studied by Novartis, EraCal’s method was novel.
“We pioneered the idea of looking at hundreds of thousands of zebrafish larvae and quantify, how much they eat, how they move, how they learn, how they listen, and how they see the world,” Jordi claimed. “The big numbers give EraCal incredible statistical power, which we use as a discovery tool to screen compounds for their impact on brain output.”
EraCal’s unique approach and its potential in the field of obesity soon attracted the interest of bigger players, leading to a research collaboration with Novo Nordisk that began in 2022, and last year’s discovery deal for weight management nutraceuticals with Nestlé Health Science.
Big Pharma Takes Note
Recognition has now led to an even bigger step up for the Swiss company. After the Danish big pharma had a chance to see the potential of EraCal’s work first-hand through the two companies’ research partnership, Novo has decided to bet on EraCal’s obesity asset. Securing exclusive rights to it for an undisclosed initial payment, plus development and commercial milestones, Novo could pay the biotech as much as EUR 235 million.
Although few details have been provided by either firm about the acquired asset, EraCal’s lead candidate is an oral small-molecule appetite suppressor previously dubbed Era-379. EraCal said in a statement that the asset “is believed to target a novel mechanism of action controlling appetite and body weight to treat obesity.”
Unlike other weight loss therapies, such as the Danish drugmaker’s Wegovy injection, the EraCal candidate is an oral therapy that targets an “undisclosed novel protein that drives peripheral liver–brain signalling and acts in concert with GLP-1-targeting agents in vivo.”
“This is an important agreement for EraCal Therapeutics as it showcases the team’s capabilities to identify new mechanisms of action and to discover and develop small molecules to target these biological pathways,” Jordi said in a statement. “We consider Novo Nordisk the ideal partner to bring this program to patients and are excited to join forces to lead innovation.”
Although Novo Nordisk’s blockbuster success with Wegovy brought in no less than UD 3.1 billion in sales in the first nine months of 2023, the firm has been looking to uncover further promising obesity therapies. Last year it acquired the Copenhagen-based biotech, Embark Biotech, focused on fat energy expenditure targets, for EUR 15 million, and Canadian Inversago Pharma with its cannabinoid receptor blocker for weight loss for USD 1.07 billion.
