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Roche has signed the biggest-ever obesity drug deal with a $5.3bn licensing agreement for a next-generation treatment from Danish biotech Zealand Pharma.
The Swiss pharmaceutical company will collaborate with Zealand on petrelintide, a drug based on the hormone amylin that helps people feel fuller for longer, as it pushes further into the lucrative weight-loss market.
The companies will develop it as a standalone drug and as a combination with Roche’s potential obesity drug, which works in a way more similar to the weight-loss drugs already on the market. It would also be a once-a-week injection. The companies will have a 50/50 profit share agreement.
Roche is one of many pharma groups trying to take a slice of an obesity treatment market that analysts have estimated could be worth between $80bn and $140bn.
Eli Lilly and Novo Nordisk dominate with their drugs Mounjaro and Wegovy respectively, but others are looking to a next generation of drugs. Zealand hopes its drug will have fewer side-effects than current treatments, which can cause problems such as vomiting and nausea.
Adam Steensberg, chief executive of Zealand, said the partnership with Roche would be “transformational”.
He described petrelintide as the next phase in the fiercely competitive weight-loss market. “It is changing the focus from who delivers the highest weight loss to who can help maintain that weight loss,” he said.
Petrelintide would be a more “pleasant” experience for patients, he added. Studies have shown amylin-based weight-loss drugs can cause fewer side-effects than current GLP1-based products.
Roughly 30 per cent of patients using weight-loss drugs drop off therapy within the first month, and after one year only 30 per cent remain, Steensberg said.
The vast majority of people are looking to lose 10 to 20 per cent of their body weight and maintain it, he added.
The combination with Roche’s potential obesity drug, meanwhile, could be used for people with more severe obesity and health issues, he said. But petrelintide would be the “backbone” of the partnership.
Manu Chakravarthy, who leads Roche’s metabolic product development, said having the two options would give choices to people who want to lose weight. “There is increasing recognition that we need optionality.”
In late 2023, Roche signed a deal worth up to $3.1bn for Carmot Therapeutics, which included three potential drugs for obesity and diabetes.
Shares in Zealand were up more than 40 per cent by mid-afternoon trading on news of the deal. Roche shares rose more than 4 per cent.
Christoph Wirtz, a portfolio manager at Rothschild, said the obesity market was already crowded. “There are a lot of trials regarding obesity with different treatment technologies.”
Eli Lilly and Novo Nordisk were in the “driver’s seat” he added, and were years ahead in expertise and manufacturing. “There is a long road ahead to make this deal successful [for Roche],” he said.
