Roche Further Boosts Obesity Pipeline With Zealand Pharma Deal Worth $5.3 Billion For Weight Loss Drugs

Roche Holdings AG RHHBY confirmed a licensing agreement with Zealand Pharma on Wednesday that will see the two companies co-develop petrelintide.

Petrelintide is Zealand Pharma's amylin analog. It’s currently in phase 2 clinical development.

Also Read: Roche Fast-Tracks Obesity Drug Development, Eyes Over $3B Sales Potential

Combining petrelintide with Roche's dual GLP-1/GIP receptor agonist CT-388 will further strengthen Roche's pipeline in cardiovascular, renal, and metabolic (CVRM) diseases.

As a part of the agreement, Zealand Pharma and Roche will co-commercialize petrelintide in the U.S. and Europe.

Roche will obtain exclusive rights to commercialization in the rest of the world and be responsible for commercial manufacturing and supply.

Zealand Pharma will receive upfront cash payments of $1.65 billion. This includes $1.4 billion due upon closing, and $250 million over the first two anniversaries of the collaboration.

Zealand Pharma is also eligible for development milestones of $1.2 billion primarily linked to initiation of Phase 3 trials with petrelintide monotherapy and sales-based milestones of $2.4 billion, for a total consideration of up to $5.3 billion to Zealand Pharma.

Profits and losses for petrelintide and petrelintide/CT-388 will be shared on a 50/50 basis in the U.S. and Europe, and Zealand Pharma is eligible to receive tiered double-digit royalties up to high teens % royalties on net sales in the rest of the world.

Zealand Pharma will pay Roche $350 million, offsettable against milestone payments, for the petrelintide/CT-388 fixed-dose combination product or next-generation petrelintide combination products being pursued under the collaboration agreement.

The transaction is expected to close in the second quarter.

In December 2023, Roche acquired a privately held obesity company, Carmot Therapeutics, for $2.7 billion in cash. Additionally, Carmot's equity holders are entitled to receive payments of up to $400 million depending on achieving certain milestones. 

Price Action: RHHBY stock is up 5.55% at $44.33 during the premarket session at the last check Wednesday.

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