Swiss pharmaceutical company Roche has announced its acquisition of Carmot Therapeutics, an unlisted obesity drug developer, for an upfront payment of $2.7 billion. This move places Roche among the contenders seeking to challenge the dominant players in the weight-loss drug market, such as Novo Nordisk and Eli Lilly.
Carmot's most promising drug candidate is CT-388, a once-a-week injection that functions as a dual GLP-1/GIP receptor agonist, similar to Lilly's Mounjaro. With encouraging Phase I trial results, CT-388 is now entering the second of three trial stages, with a potential market launch expected in the 2030s. Roche's Head of Pharmaceuticals, Teresa Graham, expressed optimism about the drug's potential.
Currently, Novo holds the weight-loss drug market lead with its injection, Wegovy, which acts as a single agonist of the GLP-1 gut hormone receptor. However, the rising demand for weight-loss drugs has led to supply constraints for Novo. This situation presents an opportunity for competitors like Roche to enter the market.
The weight-loss market is projected to be worth as much as $100 billion, making it an attractive space for pharmaceutical companies. Zuercher Kantonalbank analysts noted that there is room for "me too" products, especially at the right price. However, Roche aims to position itself beyond merely being a low-cost alternative to the market leaders. Graham believes that CT-388 has the potential to become the best obesity drug in the GLP-1 class, either on its own or in combination with other compounds.
Graham highlighted the opportunity for deeper and quicker weight loss, as well as the importance of tolerability for patients, as key focus areas for Roche's obesity drug development. Roche's ambition goes beyond simply entering the market, as they believe CT-388 can offer significant advancements in weight-loss treatment.
The acquisition of Carmot marks Roche's return to the GLP-1 field, which they had previously abandoned in 2018 when Chugai, their subsidiary, sold the rights to an experimental pill to Lilly. However, with advancements in science, Roche feels that now is the right time to reenter this space.
This acquisition falls in line with Roche's strategy under their new CEO, Thomas Schinecker, who aims to diversify the company's therapeutic fields to offset declining oncology sales. Schinecker has been actively pursuing various deals to rebuild Roche's development pipeline after significant setbacks in Alzheimer's and cancer immunotherapy.
The Carmot deal is expected to close in the first quarter of 2024. As part of the agreement, additional payments of up to $400 million may be made to Carmot's owners if certain milestones are achieved. The acquisition allows Roche to tap into Carmot's portfolio of gut-hormone drug candidates, which includes both pill and injection forms, targeting obesity treatment in patients with and without diabetes.
Overall, Roche's collaboration with Carmot sets the stage for innovative advancements in the obesity drug market, providing new opportunities for patients seeking effective weight-loss treatments.