In A $2.7 Billion Transaction, Roche Will Acquire Carmot Therapeutics, A Producer Of Obesity Drugs

Following positive phase I trial findings, the Carmot medication is ready to be tested on people in the second of three trial stages, with a prospective market debut in the 2030s, according to Teresa Graham, head of Roche’s pharmaceuticals division.

Roche has agreed to buy unlisted obesity medication researcher Carmot Therapeutics for $2.7 billion in cash up front, joining a growing number of competitors vying to take on the main makers of weight-loss drugs Novo Nordisk and Eli Lilly.

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The most promising pharmacological candidate in the US takeover target, CT-388, a once-week injection, is a dual GLP-1/GIP receptor agonist similar to Lilly’s Mounjaro or Zepbound. Following good Phase I trial findings, the Carmot medication is ready to be tested on people in the second of three trial stages, with a prospective market debut in the 2030s, according to Teresa Graham, head of Roche’s pharmaceuticals division, on Monday.

Novo, the market leader in weight-loss drugs, is ahead with its injection Wegovy, a single agonist of the GLP-1 gut hormone receptor. Overwhelming demand has forced the company to increase output. Roche shares gained 2.4% to a six-week high at 1115 GMT on anticipation that the weight-loss industry, estimated by some analysts to be worth $100 billion, can accommodate a large number of competitors.

“The markets are large enough for’me too’ products, particularly when offered at the right price,” analysts at Zuercher Kantonalbank wrote in a note. Roche’s Graham stated that the company was more ambitious than simply providing a low-cost alternative to market leaders, telling Reuters that CT-388 may become the best obesity medicine in the GLP-1 family, either alone or in combination with other molecules.

“There is opportunity for deeper weight loss, there is opportunity for that weight loss to happen more quickly and tolerability is maybe one of the bigger issues,” Graham said.

Among recent acquisitions of obesity treatment development projects, AstraZeneca agreed this month to pay up to $2 billion for the rights to an experimental tablet developed by China’s Eccogene. Lilly acquired unlisted Versanis in July for up to $1.93 billion to expand its pipeline. New Roche CEO Thomas Schinecker has set a high pace to repair a research pipeline that has been battered by severe trial setbacks in Alzheimer’s and cancer immunotherapy last year.

In October, Roche agreed to pay Roivant and Pfizer an initial $7.1 billion for rights to a new inflammatory bowel disease treatment. The Carmot transaction, which is anticipated to be finalized in the first quarter of 2024, would pay its shareholders up to $400 million in addition to the upfront payment if certain milestones were met, according to Roche. The purchase represents a return to a GLP-1 field that the Swiss drugmaker abandoned in 2018, when its affiliate Chugai sold the rights to an experimental tablet to Lilly for $50 million up front.

“This is a place where we needed the science to evolve a bit more completely,” said Graham of Roche.

Stig Hansen, the company’s long-time CEO, co-founded Carmot in 2008 and announced plans to go public last month. While remaining on the Carmot board, Hansen was appointed CEO of Kimia Therapeutics earlier this year, which was carved off of Carmot to focus on the discovery of new metabolic illness treatments. According to Roche, Carmot’s portfolio includes a variety of gut-hormone therapy candidates in pill and injection form focused at treating obesity in people with and without diabetes.

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