Roche Reignites Weight Loss Industry with Carmot Purchase
In a move to tap into the booming weight loss industry, Roche, the Swiss pharmaceutical giant, has shelled out $2.7 billion for Carmot Therapeutics. With an additional $400 million possible in performance-based milestones, the deal is set to be finalized by Q1 2024. Based in Berkeley, California, Carmot has been developing injectable and oral treatments for obesity and diabetes.
The acquisition comes as a significant turn for Roche, which, in 2018, stepped away from the weight loss market by selling its GLP-1 antagonist rights to Eli Lilly. Meanwhile, competitors like Novo Nordisk and Lilly have successfully introduced their obesity drugs, stoking a frenzy in the weight loss industry.
Carmot's primary focus is on GLP-1 antagonist drugs, a class originating from type 2 diabetes management. These drugs, such as Ozempic from Novo Nordisk and Trulicity from Lilly, have garnered acclaim from celebrities like Elon Musk and Kim Kardashian due to their effect on weight loss.
Currently, Carmot's most advanced drug, CT-388, is progressing towards phase 2 trials for obesity treatment, both for diabetic and non-diabetic patients. Injected once weekly, CT-388 is promising in promoting weight loss and may contribute to other medical treatments. Various other Carmot drugs are also under development in preclinical and clinical stages.
Following the acquisition, Vontobel analyst Stefan Schneider sees Roche's opportunity to reclaim market share in this massive market, hinging on the success of the new drugs. If proven effective and safe, the new drugs could give Roche a competitive edge in the vast weight loss and diabetes sector. Consequently, Roche stocks rose 1.4% after the news broke.
In a nutshell, Roche's takeover of Carmot enables further exploration of GLP-1 receptor agonist treatments for obesity and diabetes. The acquisition introduces new competition in the market and promises potential growth in Roche's portfolio. However, supply chain challenges may arise due to the increasing demand for weight loss therapy drugs.
