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By Maggie Fick and Ludwig Burger
ZURICH (Reuters) -Roche (ROG.SW) has acquired rights to an obesity therapy by Denmark's Zealand Pharma in a collaboration deal worth up to $5.3 billion, as the Swiss drugmaker seeks to boost its prospects in the booming weight-loss market.
The agreement covering Zealand's compound petrelintide, signals renewed efforts by Roche to catch up with obesity market leaders Novo Nordisk (NVO) and Eli Lilly (LLY).
Under the accord, Zealand will receive $1.65 billion upfront with the possibility of milestone payments taking the total sum to $5.3 billion, depending mainly on late-stage trials and sales development, Roche said.
Zealand shares leapt 45% after the announcement before easing, and were last up 24% at 0909 GMT. Roche shares gained more than 4%.
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.
The first wave of obesity drugs was based mainly on the gut hormone GLP-1, but Novo Nordisk is banking on a dual mode of action that includes amylin for its next generation of drugs, with experimental compounds called amycretin and CagriSema.
Disappointing clinical trial read-outs from CagriSema, however, have hit Novo's shares hard in the past three months. Zealand shares have also suffered on scepticism about the Danish firm's amylin approach, and were down about 30% this year before Wednesday's deal.
Other companies with early research in amylin, which is believed to better preserve lean mass than GLP-1-based drugs, include AstraZeneca (AZN.L).
Shares in Novo Nordisk were down 5.5% at 0908 GMT, the lowest level since March 2023. Jefferies analysts said in a note that they believed Zealand's petrelintide may be better than Novo's CagriSema.
Zealand and Roche will jointly commercialise 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 own experimental obesity drug 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 more than 3 billion Swiss francs in annual sales.