Roche signs biggest-ever obesity drug deal

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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. They 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.

Teresa Graham, chief executive of Roche Pharmaceuticals, said the company was aiming to “transform the standard of care and positively impact patients’ lives”.

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.

The vast majority of people are looking to lose 10 to 20 per cent of their body weight and maintain it, Steensberg said.

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.

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 have fallen 30 per cent in the past year, partly owing to the FDA, the US regulator, calling for the company to do another late-stage trial to confirm the correct dosage for a different drug that it was developing for a rare condition called short-bowel syndrome.