Roche ventures into lucrative weight-loss market with US$2.7 billion Carmot Therapeutics merger

SWITZERLAND — Swiss pharmaceutical giant Roche has strategically entered the competitive weight-loss market through a definitive merger agreement with Carmot Therapeutics, headquartered in Berkeley, California.

The deal involves an upfront payment of US$2.7 billion, set to conclude in Q1 2024, subject to regulatory approvals and anti-trust clearance. Additionally, Carmot’s equity holders stand to gain up to $400 million in milestone-based payments.

This move is poised to bring Roche into the dynamic landscape of obesity treatments, particularly with the acquisition’s focus on Carmot’s promising GLP-1 receptor agonists.

The acquisition grants Roche access to Carmot’s diverse portfolio of preclinical and clinical assets, including the star performer, CT-388—a dual agonist of GLP-1 and GIP receptors, positioned for Phase II testing.

This innovative therapy, designed for once-a-week subcutaneous injection, exhibits standalone potential or compatibility with other weight-loss treatments for various patient profiles, including those with type 2 diabetes.

CT-388’s Phase Ib study showcased “substantial weight loss,” according to Levi Garraway, Roche’s chief medical officer and head of global product development, hinting at a differentiated profile for treating obesity and associated diseases.

Roche will also gain CT-868, a mid-stage asset and dual GLP-1/GIP receptor agonist, designed for once-a-day subcutaneous injection.

This asset targets type 1 diabetes patients with overweight or obesity, as demonstrated in Carmot’s recently launched Phase II study.

The acquisition further includes CT-996, a once-daily oral small molecule agonist of the GLP-1 receptor, and Carmot’s pre-clinical programs, contributing to Roche’s comprehensive approach to addressing various health conditions.

Garraway emphasized the breadth of Carmot’s portfolio, highlighting its potential not only for obesity treatment but also for addressing cardiovascular, retinal, and neurodegenerative diseases.

The strategic move aligns with Roche’s return to the obesity market, a sector forecasted to reach a substantial valuation of up to US$200 billion in the coming years.

This acquisition follows Carmot’s recent filing for an initial public offering, showcasing resilience amid market challenges.

For Roche, it marks a pivotal moment as it seeks to reestablish its presence in the obesity market, a space it previously explored with the GLP-1 analog taspoglutide.

Eli Lilly and Novo Nordisk battle for dominance in the expanding obesity market

Meanwhile, pharmaceutical giants Eli Lilly and Novo Nordisk are intensifying their rivalry in the lucrative multibillion-dollar obesity market.

Eli Lilly’s strategic move involves the registration of a Phase IIIb clinical trial, SURMOUNT-5, pitting its Mounjaro against Novo’s Wegovy, specifically targeting obese or overweight patients with weight-related health conditions.

Globally, approximately 650 million people suffer from obesity, affecting nearly half of the American population.

Obesity, recognized as a chronic disease with limited treatment options, heightens the risk of associated health conditions like diabetes and heart disease, significantly impacting overall health.

SURMOUNT-5, enrolling 700 participants across 61 sites worldwide, initiated in April and is expected to conclude by January 2025.

The trial’s primary objective is to compare the percentage of weight loss between Mounjaro and Wegovy, with secondary metrics assessing the magnitude of weight loss achieved by patients.

Wegovy, utilizing semaglutide, stimulates glucagon-like peptide 1 (GLP-1) independently. In contrast, Mounjaro, powered by tirzepatide, activates both GLP-1 and glucose-dependent insulinotropic polypeptide (GIP), potentially yielding a more profound impact.

Both drugs have garnered public attention, receiving endorsements from Hollywood stars and even Twitter owner Elon Musk, along with viral posts on platforms like TikTok.

Despite the recent spotlight, GLP-1 weight loss drugs, including Wegovy (approved in 2021) and Ozempic (approved in 2017), have been available for some time.

UBS analysts project Mounjaro’s peak sales at US$25 billion, primarily attributing it to its effectiveness in treating diabetes and obesity, though cautious estimates suggest figures ranging from US$10 billion and below.

TD Cowen analysts project the global obesity drug market could reach US$30 billion by 2030, with Novo and Lilly leading the trajectory. A previous study by Morgan Stanley even projected a higher figure at US$50 billion.

As Eli Lilly and Novo Nordisk escalate their rivalry, the obesity market undergoes a dynamic shift with these pharmaceutical giants competing for dominance in addressing the global health concern of obesity.

Other companies eager to enter the space include AstraZeneca, which recently gained rights to Eccogene’s oral once-daily GLP-1 receptor agonist ECC5004.

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