Roche Holding AG licensed a new weight-loss drug from Zealand Pharma A/S for as much as $5.3 billion, bolstering the Swiss drugmaker’s effort to get into a hot market dominated by Novo Nordisk A/S and Eli Lilly & Co.
The agreement to collaborate on development and commercialization of the drug, petrelintide, includes an upfront cash payment of $1.65 billion, as well as milestone payments, Roche said on Wednesday. The two companies will also work on a combination treatment that would pair petrelintide with the lead experimental drug from Roche’s own portfolio.
Zealand’s shares soared as much as 48% in Copenhagen, the most in the company’s history. Roche gained as much as 3.7% in early trading in Zurich, the biggest intraday boost since last July.
The Swiss drugmaker’s biggest recent deals have been in obesity, with the Zealand partnership following 2023’s $3.1 billion acquisition of Carmot Therapeutics Inc. Roche is seeking to catch up with Novo and Lilly, whose Wegovy and Zepbound drugs are multibillion-dollar blockbusters already on the market.
The terms are a best-case scenario for Zealand, after many investors had been skeptical the Danish biotech would be able to secure a profit split, said Lucy Codrington, a London-based analyst for Jefferies.
‘Leading Franchise’
“This is a matter of developing a leading franchise for the 2030s,” Zealand Chief Executive Officer Adam Steensberg said in an interview. The tie-up “meets all the goals we set out when we started to discuss that we wanted to have a partner,” he said.
Under the terms of the deal, the two companies will jointly commercialize petrelintide in the US and Europe, with Roche obtaining the exclusive rights to commercialization for the rest of the world. Roche will be responsible for the manufacturing and supply.
Profit and losses for both petrelinide and the drug in combination with Roche’s CT-388 will be shared on a 50:50 basis in the US and Europe with Zealand receiving royalties on net sales in the rest of the world.
Petrelintide mimics a gut hormone called amylin, a different approach to obesity than the drugs now on the market. Steensberg has said early data indicates the drug has the potential to help people lose 15% to 20% of their body weight with fewer side effects than existing treatments. Late-stage trials to prove that are still to come, however.
Roche is ready to deploy about 10 billion Swiss francs ($11 billion) a year for dealmaking, Teresa Graham, chief of the pharmaceutical unit, told investors earlier this year.