Novo to buy Akero for up to $5.2 billion as new CEO bets on liver drug candidate

STOCKHOLM (Reuters) -Novo Nordisk said on Thursday it would buy U.S.-based Akero Therapeutics for up to $5.2 billion to gain access to a promising liver disease drug candidate, in the first major deal by the Danish drugmaker's new CEO to boost growth. Mike Doustdar, who took the helm at the Wegovy maker in July, has been tasked with stemming market share losses to U.S. rival Eli Lilly. Last month, Novo said it would cut 9,000 jobs. He has said the company would focus on developing the next-generation of highly effective obesity and diabetes drugs that can also treat related cardiometabolic conditions such as MASH, rather than expand into other disease areas. Akero is testing its drug, efruxifermin, in a late-stage trial in patients with severe liver scarring, or cirrhosis, due to a type of fatty liver disease known as metabolic dysfunction-associated steatohepatitis (MASH). Efruxifermin could be a potential breakthrough in the treatment of fatty liver disease and become a "cornerstone" treatment either on its own or in combination with Wegovy, Doustdar said in a statement on Thursday. Novo has offered Akero shareholders $54 per share upfront in cash, which represents a premium of about 16.2% to Akero's last close. This represents about $4.7 billion in upfront payment. Shares of the company were up nearly 18% in premarket trading. The Danish drugmaker will also pay an additional $6 per share if efruxifermin secures a full U.S. approval for the condition by June 30, 2031, the companies said. DEALS GETTING BIGGER Akero marks a sharp escalation in deal size for Novo, as its recent biotech acquisitions in metabolic diseases typically ranged between one and two billion dollars. Last year, the company bought Cardior Pharmaceuticals, which is developing a treatment for hypertension, for up to $1.1 billion. Novo's Denmark and U.S.-listed shares were both down nearly 2%. The acquisition is "costly" and indicates Novo is "still building on the breadth of its portfolio", Nordnet analyst Per Hansen said. Some Novo investors recently told Reuters that they want to see the company invest heavily in research and development to build out its future drug pipeline and revive investor confidence. Some have also said they would prefer the company diversify beyond weight loss and diabetes. (Reporting by Anna Ringstrom in Stockholm, Mariam Sunny in Bengaluru and Maggie Fick in London; Additional reporting by Elviira Luoma; Editing by Essi Lehto, Leroy Leo and Sriraj Kalluvila)

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