Roche Expands Obesity Portfolio with $5.3B Zealand Pharma Deal

Roche has made a significant move in the competitive obesity treatment market, partnering with Zealand Pharma in a deal potentially worth up to $5.3 billion. The collaboration, announced on Wednesday, centers around Zealand's amylin analog petrelintide and aims to bolster Roche's position in the rapidly growing weight loss therapeutics sector.

Deal Structure and Financial Terms

Under the agreement, Roche will pay Zealand Pharma an upfront fee of $1.65 billion to gain access to petrelintide. The deal includes potential developmental milestone payments of up to $1.2 billion, with the majority tied to the initiation of Phase III trials. Additionally, Zealand stands to earn up to $2.4 billion in sales-based milestones.

The partnership encompasses co-development and co-commercialization rights for petrelintide. In the United States and Europe, Roche and Zealand will share profits and losses equally. For other markets, Zealand will receive tiered double-digit royalties on net sales, potentially reaching the high teens in percentage terms.

Petrelintide: A Promising Amylin Receptor Agonist

Petrelintide, Zealand's investigational amylin receptor agonist, has shown promising results in early-stage trials. The compound works by lowering blood sugar levels and slowing gastric emptying, which helps suppress appetite. In a Phase Ib study completed in June 2024, petrelintide demonstrated a mean weight loss of 8.6% at 16 weeks, compared to 1.7% in the placebo group.

Roche expressed optimism about petrelintide's potential, stating that it could become a "best-in-class amylin monotherapy, with improved tolerability compared to current weight management treatments." Zealand had previously announced plans to initiate the Phase IIb ZUPREME-2 trial of petrelintide in the first half of 2025, focusing on individuals with overweight or obesity and type 2 diabetes.

Combination Therapy Strategy

A key aspect of the Roche-Zealand collaboration is the planned investigation of petrelintide in combination with CT-388, Roche's lead obesity treatment acquired through its $2.7 billion purchase of Carmot Therapeutics in December 2023. CT-388 is a dual agonist of GLP-1 and GIP receptors, designed for subcutaneous delivery to reduce blood sugar levels and appetite.

Recent Phase Ib data for CT-388 showed promising results, with patients experiencing an average body weight reduction of 18.8% compared to placebo after 24 weeks of treatment. Roche believes that combining CT-388 with petrelintide "offers the opportunity for best-in-disease efficacy while potentially offering enhanced tolerability."

This strategic partnership underscores Roche's commitment to expanding its presence in the obesity treatment market, leveraging both internal development and external collaborations to build a comprehensive portfolio of weight management therapies.