Roche secures Zealand obesity drug candidate for up to $5.3 billion

Logo of Swiss drugmaker Roche is seen in Basel · Reuters

ZURICH (Reuters) -Roche acquired rights to an obesity therapy by Danish biotech firm Zealand Pharma in a collaboration deal worth up to $5.3 billion, as the Swiss pharmaceutical company seeks to boost its prospects in the booming weight-loss market.

The deal covering the compound petrelintide, announced by Roche on Wednesday, marks renewed efforts to catch up with weight-loss market leaders Novo Nordisk and Eli Lilly.

"We are excited to collaborate with Zealand Pharma and develop this promising therapy, which we hope will provide people living with obesity and related comorbidities a new treatment option," Teresa Graham, CEO of Roche Pharmaceuticals said of the exclusive collaboration and licensing agreement.

Under the accord, Zealand Pharma will receive upfront cash payments of $1.65 billion with the possibility of milestone payments taking the total sum up to $5.3 billion, depending mainly on phase 3 trials and sales development, Roche said.

Zealand is currently testing petrelintide in overweight or obese individuals without type 2 diabetes in a mid-stage study.

Petrelintide belongs to a class of drugs known as long-acting amylin analogues, which mimic a hormone called amylin that is co-secreted with insulin in response to ingested nutrients.

Zealand and Roche will jointly commercialize petrelintide in the United States and Europe, and the Swiss company will obtain exclusive commercialisation rights in the rest of the world.

Profits and losses for petrelintide, as well as a fixed-dose combination with Roche's CT-388, will be shared on a 50/50 basis in the U.S. and Europe, said Roche.

The transaction is expected to close in the second quarter.

Roche, which in late 2023 agreed to buy drug developer Carmot, said in September three early-stage obesity and diabetes drug candidates from that acquisition have a combined potential of over 3 billion Swiss francs in annual sales.

(Writing by Miranda Murray and Dave Graham, Editing by Rachel More and Ludwig Burger)