Roche and Zealand Pharma inked a $5.3 billion deal Wednesday to collaborate on a weight-loss drug in the amylin class, rivaling Novo Nordisk, AstraZeneca and AbbVie.
The agreements covers Zealand's drug, petrelintide, which works by mimicking the amylin hormone. Amylin is co-secreted with insulin. In theory, these drugs could preserve lean muscle mass better than GLP-1-based drugs. Companies are testing amylin drugs alone or in combination with GLP-1 drugs.
Roche and Zealand Pharma agreed to co-develop and co-commercialize petrelintide as a single drug and in a combination with Roche's CT-388. Roche acquired CT-388 in its $2.7 billion takeover of Carmot Therapeutics. CT-388 mimics GLP-1 and GIPR, hormones tied to hunger and blood sugar.
Over-the-counter shares of Roche stock rose 3.9% to 43.60. Zealand Pharma stock doesn't trade in the U.S., but its Copenhagen-based shares closed up nearly 38%.
Roche, Zealand Pharma Take On Novo Nordisk, Others
Roche and Zealand say this is the biggest deal, so far, in the weight-loss world.
The company will pay Zealand $1.65 billion up front in cash, with $1.4 billion due at the deal's close and $250 million in anniversary payments over two years. Zealand Pharma is also eligible to receive potential milestone payments.
The companies will share profits and losses equally in the U.S. and Europe, while Zealand will earn royalties on sales in the rest of the world.
Adam Steensberg, chief executive of Zealand, called the deal a "transformational partnership" and Roche "the ideal partner."
"We strongly believe that petrelintide holds potential as a foundational therapy for weight management, addressing unmet medical needs among the majority of people living with overweight and obesity, both as a stand-alone therapy and in combination with other agents," he said in a written statement. "This collaboration with Roche is a step change to realize this vision, while solidifying Zealand Pharma as a key player in the future management of obesity."
Novo Shares Continue Selling Off
The news sent Novo Nordisk stock down 4.3% to 74.73.
Earlier this week, Novo shed more than 9% after its drug, CagriSema, failed to top Eli Lilly's Zepbound in a Phase 3 study. CagriSema mimics GLP-1 and amylin. Over 68 weeks, patients with diabetes and obesity lost 15.7% of their body weight, compared to a 3.1% loss for placebo recipients. Analysts said that's comparable with Lilly's Zepbound.
AbbVie also announced this month it licensed an obesity treatment from Gubra. The Gubra drug is a long-acting amylin-based drug that also mimics calcitonin. Calcitonin regulates calcium levels.
Zealand Pharma is currently testing petrelintide in two midstage studies, with plans for a final-phase test underway. According to CNBC, the drug could hit the market in 2030.
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