Blackstone (BX.US) injects up to $1.5 billion, providing fresh ammunition for Pfizer (PFE.US) in the weight-loss drug race

According to Zhihong Finance APP, Pfizer (PFE.US) announced on Wednesday that it has reached an agreement with Blackstone (BX.US) to secure up to $1.5 billion in funding to support the development of its experimental monthly obesity treatment drug. According to a statement released by both companies, funds managed by Blackstone Life Sciences, a subsidiary of Blackstone, will cover up to $1.5 billion in development costs for the drug through 2028. The drug, an injectable called berobenatide, is being tested by Pfizer as a monthly weight loss injection.

In exchange for providing the funding, Blackstone will be eligible to receive milestone-linked payments but will not acquire any rights or ownership in berobenatide. The specific amount of the milestone payments was not immediately disclosed by the two companies.

The statement noted that the related payments will depend on U.S. regulatory approval for the use of injectable berobenatide as a monthly monotherapy for chronic weight management, as well as the drug reaching certain commercial sales milestones. Pfizer stated it will retain full control over the drug’s development project and will keep complete ownership of the medication.

It is understood that last year, Pfizer acquired berobenatide through the purchase of Metsera for up to $10 billion. This acquisition was arranged toward the end of several M&A deals by Pfizer, aiming to offset pressure from declining COVID-19 product revenues and key drug patents expiring, and to seek to challenge industry leaders Eli Lilly (LLY.US) and Novo Nordisk (NVO.US) in the weight loss drug market.

Pfizer currently has 10 ongoing or planned phase 3 clinical trials of berobenatide and says it is exploring the drug both as a standalone therapy and in combination with other peptide drugs.

Cecile Guegan, Pfizer’s new Chief Financial Officer, stated in the announcement that the company aims to take a disciplined approach that combines internal R&D investment with targeted investments from capital partners, while bringing important new medicines to patients. Pfizer said the deal will give it greater flexibility to invest in a broader treatment pipeline and help advance its substantial obesity portfolio, while preserving resources for other therapeutic areas.

In recent years, Blackstone has increasingly participated in pharmaceutical development financing. In 2024, Blackstone reached an agreement to help fund Moderna’s (MRNA.US) flu vaccine trials, which received approval in the U.S. this summer. Pfizer also previously cooperated with Blackstone in a similar way: in April 2023, Pfizer and Blackstone signed an agreement for up to $550 million in funding by the end of this year to co-fund the development costs of certain therapeutic drugs.