Swiss pharmaceutical giant Roche has entered into a significant licensing agreement with Danish biotechnology company Zealand Pharma, committing to pay up to $1.65 billion for rights to an experimental obesity treatment currently in Phase 2b trials.
The collaboration, announced Wednesday, involves an upfront payment of $1.4 billion to Zealand, with an additional $250 million in
anniversary payments. The deal could potentially reach $5.3 billion if certain milestones are achieved. Both companies will share profits and losses while co-commercializing the drug, called petrelintide, in American and European markets.
This strategic move expands Roche’s presence in the rapidly growing obesity treatment sector, which analysts project could reach $100 billion in annual sales. The agreement gives Roche access to an amylin analog, a distinct class of drugs that wasn’t part of its previous $2.7 billion acquisition of Carmot Therapeutics in late 2023.
Roche intends to develop petrelintide both as a standalone treatment and in combination with other medications, including CT-388, a GLP-1/GIP combination drug acquired through the Carmot deal. Zealand has the option to contribute up to $350 million toward combination therapy development costs.
The partnership follows a broader industry trend of pharmaceutical companies pursuing obesity treatments, as evidenced by AbbVie’s recent $350 million licensing agreement with Danish company Gubra for a similar amylin-targeting drug.
Despite some market uncertainty following Novo Nordisk’s challenges with its combination treatment CagriSema, which pairs an
amylin-targeting drug with Wegovy’s active ingredient, interest in amylin analogs remains strong. While CagriSema showed improvements over Wegovy, it failed to demonstrate superior results compared to Eli Lilly’s Zepbound, which combines GLP-1 and GIP hormone targets.
William Blair analyst Andy Hsieh suggests that GLP-1/GIP combinations currently represent the most promising approach for widespread weight loss treatment, offering manageable side effects. However,
amylin-stimulating drugs continue to show potential for weight reduction, particularly when used in combination with other obesity medications.
The agreement addresses a crucial manufacturing concern for Zealand, as Roche will assume responsibility for commercial manufacturing and supply. This arrangement helps avoid potential production challenges that have affected other obesity drug manufacturers, such as Novo Nordisk and Eli Lilly, who initially struggled to meet overwhelming demand for their products.
The timing of this deal is significant, coming shortly after Zealand’s competitor Viking announced a $150 million agreement with a contract manufacturer to ensure supply for its experimental obesity treatments. Industry analyst Tsieh expressed optimism about Roche taking on manufacturing responsibilities as part of the agreement.
The obesity treatment landscape has become increasingly competitive, with multiple pharmaceutical companies including Novo Nordisk, AbbVie, Eli Lilly, AstraZeneca, and startup Metsera all developing
amylin-targeting agents. This latest partnership between Roche and Zealand represents another significant step in the industry’s aggressive pursuit of effective obesity treatments, as companies continue to invest heavily in developing new therapeutic options for this growing market.
The collaboration demonstrates Roche’s commitment to expanding its obesity drug portfolio while providing Zealand with substantial resources and manufacturing capabilities to advance their promising treatment candidate.