Omega Therapeutics stock more than doubles on Novo Nordisk obesity drug research pact

By Ciara Linnane

Omega's stock soars 109% after Novo Nordisk unveils a collaboration

Novo Nordisk has entered research collaboration agreements with Omega Therapeutics Inc. and Cellarity Inc. on new treatments for obesity management, sending Omega's stock up 109% on Thursday.

The stock was on track for its biggest one-day gain since it went public in 2021. Volume of more than 55 million shares traded compared with the daily average of 246,500 over the last 65 days.

The Danish developer of weight-loss drugs Ozempic and Wegovy said the agreements are the first to be drawn up under an existing partnership with Cambridge, Mass.-based biotech Flagship Pioneering.

The Omega (OMGA) collaboration will leverage that company's proprietary platform technology to develop an epigenomic controller that aims to enhance metabolic activity. Omega, which is also based in Cambridge, is a clinical-stage biotech specializing in programmable epigenomic mRNA medicines to treat or cure a range of diseases.

Read now: Five obesity-drug trends to watch in 2024: Who can compete with Eli Lilly and Novo Nordisk?

The Cellarity collaboration aims to discover biological drivers of metabolic dysfunction-associated steatohepatitis, or MASH, and will seek to develop a small molecule therapy against this disease. MASH is a chronic liver disease with a high unmet patient need for which there is currently no treatment.

Cellarity, based in Somerville, Mass., was created by Flagship Pioneering and launched in December 2019 with the aim of developing medicines by studying and altering the cellular signatures of disease.

Novo Nordisk (NVO) (DK:NOVO.B) will reimburse R&D costs for each company and Flagship's Pioneering Medicines will be eligible to receive up to $532 million in upfront and milestone payments, along with tiered royalties.

"Novo Nordisk is committed to advancing new treatment options for people living with cardiometabolic diseases," Novo Nordisk's Chief Scientific Officer Marcus Schindler said in a statement.

"To that end, it is essential that we complement our internal research with external innovation and work with partners who are bringing forward cutting-edge technology."

More than 800 million adults globally are living with obesity, according to Novo Nordisk. Most of the existing therapies focus on appetite regulation. The Omega platform seeks to use the body's innate mechanisms to control cellular identity and gene expression and enhance thermogenesis, or the production of heat within tissues to raise body temperature, a natural metabolic function that regulates overall energy balance.

"Precision epigenomic control is an emerging approach to medicine that allows us to pre-transcriptionally modulate gene expression with an unparalleled level of specificity," said Mahesh Karande, president and CEO of Omega Therapeutics.

Novo's U.S.-listed shares were up 3%.

See now: Novo Nordisk, maker of Ozempic and Wegovy, to invest more than $6 billion to expand production

-Ciara Linnane

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01-04-24 1058ET

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