Betting on the liver disease treatment track, Novo Nordisk makes a hefty $5.2 billion acquisition of Akero

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Novo Nordisk has agreed to acquire U.S. biotechnology company Akero Therapeutics for up to $5.2 billion, aiming to secure a promising liver disease drug and further expand its presence in the treatment of obesity-related metabolic diseases to counter increasingly fierce market competition.

On Thursday, the Danish pharmaceutical giant announced it would acquire Akero with a cash prepayment of $54 per share, about a 16% premium to Akero’s Wednesday closing price of $46.49. Under the agreement, if the drug receives full U.S. approval for the relevant indications by June 30, 2031, Novo Nordisk will pay Akero shareholders an additional $6 per share, known as a contingent value right (CVR).

This is the first major deal by Novo Nordisk’s new CEO Mike Doustdar since taking office in July, highlighting his determination to boost sales growth and fend off pressure from U.S. rival Eli Lilly. After the news was announced, the markets reacted swiftly: Akero shares jumped more than 19% in pre-market trading, while Novo Nordisk’s share price fell nearly 2%.

In a statement, Mike Doustdar said Akero’s drug candidate has the potential to become a “cornerstone” therapy for metabolic dysfunction-associated steatohepatitis (MASH), either as a standalone treatment or in combination with Novo Nordisk’s blockbuster weight-loss drug Wegovy.

Targeting the promising liver disease market

The core asset in this acquisition is Akero’s experimental drug efruxifermin, which is currently in late-stage clinical trials for serious liver scarring (cirrhosis) caused by MASH, a disease resulting from excessive fat buildup in the liver.

Novo Nordisk believes that efruxifermin has the potential to become the first therapy capable of reversing end-stage liver damage associated with MASH. MASH is closely linked to obesity, making this drug highly synergistic with Novo Nordisk’s existing product line. It is reported that some Novo Nordisk investors have recently hoped the company would step up R&D investment to build its future drug pipeline and boost investor confidence with new growth stories.

This acquisition by Novo Nordisk also highlights MASH as an increasingly important field, and as a key battleground closely tied to the fiercely competitive obesity drug market. There have been frequent deals in this sector recently, with pharmaceutical giants strengthening their positions through M&A.

Just last month, Roche agreed to acquire 89Bio Inc. for up to $3.5 billion to expand its portfolio in this disease area. In addition, GSK also acquired a potential MASH drug for up to $2 billion earlier this year.

Strategic moves by the new CEO

For Mike Doustdar, who took over as CEO of Novo Nordisk in July, this acquisition is a key step in addressing growth and competitive pressures. Just last month, the company also announced it would lay off 9,000 employees.

This move comes at a time when Novo Nordisk faces intense competition from rivals like Eli Lilly in the obesity treatment field. According to Bloomberg, due to investor concerns about its competitiveness in obesity, Novo Nordisk’s share price has fallen about 53% over the past 12 months.

Mike Doustdar has previously stated that the company will focus on developing next-generation, highly effective obesity and diabetes drugs that can also treat related cardio-metabolic diseases like MASH, rather than expanding into other disease areas. This acquisition is highly consistent with that strategy.

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