Roche strikes landmark $5.3 billion deal for Zealand's obesity drug as pharma race intensifies

Seeking to boost its perspective in the weight-loss market, Swiss pharma giant Roche signs the biggest ever obesity drug deal, acquiring the rights to drug therapy from Danish biotech Zealand Pharma for a record $5.3 billion.

The obesity treatment market worth an estimated $80bn - $140bn is largely dominated by Eli Lily and Novo Nordisk and their drugs Mounjaro and Wegovy, respectively. However, in this $5.3bn deal Roche seeks to establish a more firm position in this lucrative market. The companies plan to collaborate on Petrelintide, a drug based on a hormone called amylin, which has been proven to help people feel fuller for longer, simultaneously decreasing the desire to eat. CEO of Zealand, Adam Steensberg, called the partnership with Roche "transformational."

Following the contract, Roche will pay upfront cash payments of $1.65 billion. Later, depending mostly on the phase 3 trials of the drug and future sales development Zealand will receive milestone payments with a total summing up to $5.3 billion. Collaborative commercialization profits from the U.S. and Europe are set to be split on a 50/50 basis, reserving exclusive rights to commercialize in the rest of the world for Roche, said the Swiss pharmaceutical giant. 

Petrenalintide belongs to the group of medications known as long-acting amylin analogues. This category is renowned for mimicking the hormone amylin, which is released with insulin in response to nutrition intake. Petrelintide is now being tested in overweight or obese people with type 2 diabetes as part of a mid-stage trial. The company believes that its medicine will have fewer negative effects than current treatments worldwide. Existing medications are known to frequently produce symptoms such as vomiting or nausea. Following that, Teresa Graham, CEO of Roche Pharmaceuticals, further highlighted the company's objective to "transform the standard of care and positively impact patients' lives." 

It is still worth mentioning that in late 2023, Roche signed a deal to buy drug developer Carmot Therapeutics, acquiring three early-stage obesity and diabetes drug candidates, which shows the company's desire to dominate the obesity market. It is estimated that those treatments have a potential of over 3 billion Swiss Francs in annual sales.

The Roche and Zealand transaction is expected to close in the second quarter of 2025. If Petrelintide turns out to be successful, it could significantly impact both companies financially. It is an ideal opportunity for Roche to establish a strong presence in the lucrative obesity treatment market. For Zealand, the deal provides immediate funding for further drug development and “is a step change to realize this vision, while solidifying Zealand Pharma as a key player in the future management of obesity,” Adam Steensberg concluded.