Swiss pharmaceutical giant Roche has entered into a significant licensing agreement with Danish company Zealand Pharma, committing to pay up to $1.65 billion for rights to an experimental obesity treatment currently in Phase 2b trials.
The deal, announced Wednesday, includes an upfront payment of $1.4 billion to Zealand, with an additional $250 million in anniversary payments. The total value could reach $5.3 billion if certain milestones are achieved. The agreement establishes a
co-commercialization partnership between the two companies in the United States and European markets, with both sharing in profits and losses.
The experimental drug, petrelintide, represents Roche’s entry into the amylin analog class of obesity treatments, complementing its portfolio following the Carmot Therapeutics acquisition from 15 months ago. Roche intends to evaluate petrelintide both as a standalone treatment and in combination with other drugs, including CT-388, a GLP-1/GIP combination therapy acquired through Carmot.
This latest move reflects the pharmaceutical industry’s growing interest in the obesity treatment market, which analysts project could reach $100 billion in annual sales. The deal follows AbbVie’s recent $350 million agreement with Danish company Gubra for similar technology.
The timing is notable, coming despite some industry uncertainty following Novo Nordisk’s mixed results with CagriSema, a combination treatment that pairs an amylin-targeting drug with Wegovy’s active ingredient. While CagriSema showed improvements over Wegovy alone, it failed to demonstrate superior efficacy compared to Eli Lilly’s Zepbound, which combines GLP-1 and GIP targeting mechanisms.
William Blair analyst Andy Hsieh suggests that GLP-1/GIP combinations remain the most promising approach for widespread weight loss treatment, offering manageable side effects. However, the potential for amylin-targeting drugs in combination therapies continues to attract major players, including Novo Nordisk, AbbVie, Eli Lilly, AstraZeneca, and startup Metsera.
A significant advantage of the deal for Zealand is Roche’s assumption of commercial manufacturing and supply responsibilities. This addresses a crucial challenge in the obesity drug market, as evidenced by Novo Nordisk and Eli Lilly’s initial struggles to meet demand for their products. Recently, competitor Viking Therapeutics invested $150 million in manufacturing capabilities through a contract manufacturer.
The agreement also includes a provision where Zealand could
potentially reimburse Roche up to $350 million for combination therapy development costs. This arrangement highlights the strategic importance both companies place on developing effective combination treatments for obesity.
The market for obesity treatments has seen intense activity, with multiple pharmaceutical companies seeking to develop alternatives to existing options like Wegovy and Zepbound. This comes as healthcare providers and insurers, including Medicare and Medicaid, grapple with coverage decisions for these expensive but increasingly popular treatments.
Roche’s expanded presence in the obesity drug market through this deal demonstrates the company’s commitment to developing what it calls “differentiated” obesity treatments. The partnership with Zealand provides Roche with a promising candidate in the amylin analog class while giving Zealand access to substantial resources for development and commercialization.
The move represents another significant step in the rapidly evolving obesity treatment landscape, where pharmaceutical companies are racing to develop more effective and convenient options for patients struggling with weight management. The focus on combination therapies and novel mechanisms of action suggests the market will likely see continued innovation and competition in the coming years.