Serial Salesman: Kalera Ron Renaud’s chief executive created and sold three biotechnologies, the last for $ 8.7 billion. “Companies buy. They are not sold,” he says. But the frenzy of the obesity market could make Kailera a primary acquisition target.
Albie Colantonio for Forbes
Kailera jumped on the losing weight line-of-lifting four-taps from China, which rapidly emerge as a R&D pharmaceutical center, after all, why do you spend millions trying to develop new drugs?
In In the summer of 2023, Dr. Amir Zamani, a 42 -year -old trained physician Johns Hopkins, who is a partner in Bain Capital’s Life Sciences team in Boston, was obsessed with obesity drugs. Ozempic, the blockbuster that can inject type 2 diabetes from Novo Nordisk, took America out of the storm, at a rate to produce about $ 14 billion in revenue of that year for the Danish pharmaceutical giant. Eli Lilly was approaching the approval of the FDA for the similar weight loss drug, the Zepbound. Zamani was eagerly wanted to find a competitor. He had read the early research for two years and spent months digging through dozens of dozens of companies. He then hit the gold in an unexpected place: the portfolio of Jiangsu Hengrui pharmaceuticals, one of China’s largest pharmaceutical companies.
It was presented in the early clinical data derived from it was a possible next-generation weight loss treatment, which, such as OZEMPIC and Zepbound, are aimed at blood sugar and appetite GLP-1 regulatory hormone. “It was like,” wait a second, it’s ahead of all those who are not Novo or Lilly, “he says.
The results from Phase II clinical trials in China eventually showed that 59% of participants lost 20% or more of their body weight at a dose of eight kilometers of the drug in 36 weeks and the side effects were mild. If these results keep, the drug could be particularly useful for severe obese patients who should lose more weight than they can in available medicines.
Better, it was available for license. “We said,” Gosh, this seems to be really a better treatment in the class, “Zamani remembers, noting that the portfolio also included three other medicines, two of them easily administered pills. “Then we got very serious.”
It was that Chinese drug development was largely for the creation of drugs for the local market. But for the last 10 years, with Beijing focusing on building an inherent biotechnological industry, Chinese scientists trained in the US have returned home and began to innovate instead of imitating. A January report by analyst Stifel Tim Opler noted that almost one -third of the molecules coming from large pharmaceutical companies through licensing agreements come from China. US clothes have spent $ 8.1 billion on payments in advance for Chinese drugs between 2020 and 2024, compared to $ 536 million in the past five years, according to the Biopharma database. While US regulations have rejected investments in Chinese companies, there are few restrictions on US companies buying or licensed medicinal assets created there. “When new biology hits or new sets of goals prove, suddenly everyone who wants one of them just go shopping in China,” says Jory Bell, a VC Firm Playground Global associate.
From HIV to GLP-1: John Milligan, former CEO of Gilead and president of Kailera, has been surprised by studies showing the benefits of obesity drugs beyond weight loss. “It shows how important metabolic health in longevity is,” he says.
John Milligan by Victor Blue Bloomberg
Zamani did not waste time with obesity drug, quickly working with Cambridge of Massachusetts VC Shop Atlas Venture and New York’s RTW investments. The three companies invested $ 400 million to return to Kailera Therapeutics in October, starting with a license for the four Hengrui treatments and a plan to promote them in the market. With a ready -made portfolio of four drugs, it should allow Kilera to move quickly to a space that has become extremely competitive, as Ozempic became a home name. Global sales of the category carried 50% last year to $ 36 billion and could again exceed $ 131 billion, by 2028, according to North Carolina’s IQVIA research company.
To run Kailera, investors hired an all-star: Ron Renaud, a 56-year-old former biotechnology analyst with an almost unparalleled history of biotechnology and then sell them for big profits. In the last decade, Renaud has run and sold three companies – Idenix (hepatitis C), translate Bio (MRNA Therapeutics Company) and Cerevel (centered on neurological diseases) – for a total of $ 16 billion.
“We probably have the most advanced, different retarded stadium conductor that focuses solely on weight management except Big Pharma,” he says.
Going to China, Kailera omitted years of research and laboratory work. Renaud is now planning to move aggressively with Phase III clinical trials in the US for the first drug in hopes of bringing it to the market by 2030, if not earlier. This may sound very far away, but in the development and approval plan of drugs, it is lightning-gravity, thanks to Hengrui’s early work. If all goes well, Kailera’s first drug should start in front of competitors who are now doing early and medium -stage clinical trials. And the fact that Kailera’s licensing deal with Hengrui includes two oral drugs is a potentially huge advantage in a market dominated by injectable drugs. The pills are so big that Lilly had stored about $ 550 million worth of GLP-1’s mouth losing orforglipron at the end of the year, despite the fact that she has no FDA approval. Pills, after all, are not only less intimidating for patients, but also cost much less for production and distribution.
About 40% of American adults are obese. This means that there is today a group of more than 100 million people who could medically qualify for one of Kailera’s therapeutics. And this, says Renaud, is before you calculate the growing rate of obesity, the world market beyond states or potential for these medicines to deal with related conditions, including cardiovascular disease and even in some cancers. “This is an incredible opportunity in the market,” he says. “This is not going to be treated by a single drug, or two, or three.”
Patrick Welsh for Forbes
How to play it
By John Buckingham
Zimmer Biomet, Which specializes in orthopedic implants for hips, knees, legs, ankles, shoulders and other surgical implants, is facing investors about the possible effects of GLP-1 (such as Ozempic), which have the potential to make a worldwide rates. The thought is that lower body mass indicators could lead to less joint -related surgery. ZBH CEO Ivan Tornos claims that the opposite is true. The lower rates of obesity will actually be a push for Zimmer, believing that damaged cartilage, osteoarthritis and other common issues are usually irreversible and thinner people will want to be more mobile. ZBH should be negotiated for more than the current P/E ratio of Forward P/E, given the healthy development of the threshold line for the foreseen future and the historical medium P/E in the mid -20s.
John Buckingham is a portfolio manager and editor of Prudentspeculator
“I don’t know how you make decisions about medicines unless you understand things at a low level and Ron was the man – he always understood his business at a low level,” says John Milligan, former CEO of Gilead Sciences, who is now president of Kailera. (The two met for the first time in the early 2000s, when Milligan was Gilead’s CFO and Renaud was a biotechnology analyst who refused to put a “purchase” in the stock then.)
For Kailera, the next step is to take its first medicine ready to go through the approval of the FDA, while creating research and production in large -scale US clinical trials, such as those required for weight loss medications that cost a fortune, and Kailera should raise capital. While Renaud will not talk about what the company may be worth, the Pitchbook says it was estimated at $ 595 million in its original funding. Early stadium was negotiated by public obesity Biotechs Metsera and Viking Therapeutics Sport Market Caps in the range of $ 3 billion.
In October, Renaud hired Scott Wasserman, who served as AMGEN’s first cardiologist and created his cardiovascular and metabolic portfolios as his head. Subsequently, in January, he brought to one of the country’s leading drug traders as head of the commercial employee: Jamie Coleman. Her previous concert? Restore Zepbound for Lilly.
President Milligan says the obesity sector is much higher than those of HIV and hepatitis C when it was driving Gilead, which had a recent $ 133 billion market. “We can build an important company if we can get enough capital and prevent acquisitions, which is difficult to do in this industry,” he says. If it can’t, Kailera can go on the way to Renaud’s previous efforts and end to being sold to one of the big pharmaceutical companies, adding a fourth notch to his belt and possibly billions of dollars.
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