Roche says it’ll move quickly with ‘differentiated’ obesity drugs

Roche is best known for the cancer drugs that still account for much of its drug revenue. But the Swiss pharmaceutical giant spent much of its latest quarterly earnings call fielding questions about a pair of experimental weight loss medicines that have fast become important to its future growth.

Roche last year acquired those medicines in a $2.7 billion deal for biotechnology company Carmot Therapeutics. One, CT-388, is an injectable therapy, while the other, CT-996, is a pill. Since May, both have since shown the potential in early trials to spur significant weight loss, adding billions to Roche’s market value and making the company a surprise player in one of the most lucrative areas of drug research.

“It’s going to be a huge market,” CEO Thomas Schinecker said on a conference call. “By 2035, about 50% of the world’s population will be obese.”

Like Amgen, Pfizer and biotechnology company Viking Therapeutics, Roche aims to develop a rival to fast-selling medicines from Eli Lilly and Novo Nordisk. Those drugs, Zepbound and Wegovy, have proven powerfully effective at lowering weight. Studies have pointed to other health benefits for these and other so-called incretin medicines as well. But there is room for improvement, as current therapies are injected once-weekly, come with gastrointestinal side effects and can cause people to lose muscle mass along with weight. Demand is currently outstripping the available supply as well.

In an earnings presentation Thursday, Roche said its injectable therapy has “best-in-class potential,” having helped people lose nearly 20% of their body weight over six months, when adjusted for a placebo. Schinecker also noted that Roche can use its existing manufacturing network to quickly scale up production of its oral drug if testing is successful. A third therapy, dubbed CT-868, is “specifically designed” for Type 2 diabetes, he said.

But Roche’s drugs are well behind others, which could make it difficult for the company to stand out. A Phase 2 study of the injectable medicine will begin this quarter, with a mid-stage study for the oral therapy following next year. Large, late-stage trials would follow, meaning by the time the drugs get to market, one analyst noted, they could be the “fourth or fifth” of their kind available.

Schinecker responded that certain characteristics of Carmot’s drugs make them unique, which in turn could lead to differentiating results. Roche also acquired an “array of assets” in the deal, some of which are aimed at separate, unspecified targets. The company intends to combine some of them with drugs from its in-house pipeline to help preserve muscle mass.

Schinecker additionally claimed, without offering specifics, that Roche can get to market much more quickly than investors assume and is pumping more money in manufacturing ahead of time.

“There are many opportunities that we believe can [help] differentiate,” he said. “We can be very fast on this, and be a very competitive player in space.”

The company is open to doing other obesity-related deals as well, with Schinecker noting last year’s Carmot buyout is a template of something “you could imagine for this year,” depending on the cost and availability of potential assets.

Roche will present more data from early-stage trials of CT-388 and CT-996 at a medical meeting in September. That month, on a scheduled investor day, the company also intends to reveal more about its obesity drug development strategy.

Beyond obesity, Roche is interested in how incretin drugs may curb systemic inflammation, making them potentially worth exploring as part of combination therapies for neurological conditions like Alzheimer’s and Parkinson’s, said Teresa Graham, the head of the company’s pharmaceuticals division.

Roche shares climbed about 3% in Thursday trading.

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