Roche Expands Obesity Pipeline with $1.65B Zealand Pharma Deal

In a significant move to bolster its presence in the competitive obesity treatment market, Roche has announced a substantial deal with Zealand Pharma. The Swiss pharmaceutical giant will pay $1.65 billion upfront to codevelop and co-commercialize Zealand's long-acting amylin analog, petrelintide, with potential additional payments of up to $3.6 billion in milestones.

Deal Structure and Financial Details

Roche's commitment includes an initial payment of $1.4 billion upon closing, followed by two annual installments of $125 million each. The agreement also outlines up to $1.2 billion in development milestones, primarily tied to the initiation of phase 3 trials for petrelintide as a monotherapy, and up to $2.4 billion in sales-based milestones.

The collaboration terms stipulate an equal profit and loss sharing arrangement between Roche and Zealand in the U.S. and European markets. For the rest of the world, Zealand will receive royalties of up to high teens percentage on net sales. Additionally, Zealand is required to contribute $350 million, which can be offset against milestone payments, for the development of combination therapies involving petrelintide and Roche's GLP-1/GIP receptor agonist CT-388 or next-generation products.

Strategic Significance and Market Position

This partnership marks a significant expansion of Roche's obesity treatment portfolio, following its late 2023 acquisition of Carmot Therapeutics for $2.7 billion. The deal with Zealand Pharma positions Roche competitively in the rapidly evolving obesity treatment landscape, where rivals like Novo Nordisk have made substantial progress.

Manu Chakravarthy, M.D., Ph.D., Roche's global head of cardiovascular, renal, and metabolism product development, had previously indicated the company's interest in expanding its obesity treatment options, specifically mentioning amylin analogs as an area of focus.

Clinical Development and Future Prospects

Zealand Pharma is currently conducting a phase 2b study of petrelintide in individuals with overweight or obesity, with enrollment expected to conclude by the end of the month. The study's primary endpoint will assess change in body weight from baseline after 28 weeks, with the trial remaining blinded through 42 weeks.

Zealand has projected that petrelintide as a monotherapy could lead to 15% to 20% weight loss after one year or more of treatment. The potential combination with Roche's CT-388 is anticipated to yield even more significant weight loss results.

As the obesity treatment market continues to evolve, this collaboration between Roche and Zealand Pharma represents a strategic move to develop competitive therapies and capture a significant share of this growing pharmaceutical sector.