On Monday Eastern Time, Swiss pharmaceutical giant Roche announced its entry into the weight loss drug market through acquisition, challenging weight loss drug giants Novo Nordisk and Lilly.
After the announcement of Roche's acquisition project, the concept of GLP-1 weight loss drug acquisition has once again been hyped up in the US stock market.
Roche makes a big move to acquire a weight loss pharmaceutical company
On Monday Eastern Time, Roche announced its agreement to acquire unlisted American weight loss drug developer Carmot Therapeutics for an initial price of $2.7 billion.
Roche stated that according to the trading contract, the transaction is expected to be completed in the first quarter of 2024. If Carmot Therapeutics achieves individual milestones with its drugs, the company's shareholders can receive $400 million.
After the transaction is completed, Roche will acquire all current clinical and preclinical assets of Carmot Therapeutics, and employees of Carmot Therapeutics will also join Roche's pharmaceutical department.
For Roche, this transaction marks the company's return to the GLP-1 field. Previously, in 2018, Roche abandoned the GLP-1 field when its subsidiary sold a patent for an experimental drug to Lilly for a prepayment of $50 million.
Li Ka shing's figure appears behind the cartoon
Carmot Therapeutics is an American biotechnology company in the clinical stage. The company was founded in 2008, and its co-founder, Stig Hansen, has also served as the company's CEO for a long time.
Last month, Carmot Therapeutics just submitted its prospectus and was preparing to go public on NASDAQ, but in the blink of an eye, it was acquired by Roche.
Public information shows that Carmot Therapeutics is committed to the development of metabolic disease drugs. At present, the company's products include subcutaneous and oral incretin drugs, which help to treat obesity in diabetes and non diabetes patients, and several preclinical plans.
It is worth mentioning that at the end of 2017, Victoria Harbour Investment, a subsidiary of Li Ka shing, took the lead in participating in the B-round financing of Carbon Therapeutics. According to the prospectus submitted by Carmot Therapeutics last month, the founder of Victoria Harbour Investment, Zhou Kaixuan, personally holds 9.32% of the company's equity.
Perhaps the best GLP-1 weight loss medication?
The most promising drug under research of Carmot Company is CT-388, which belongs to a class of GLP-1/GIP double target receptor agonists, and is injected once a week. Its effect is similar to that of Mounjaro, a diabetes drug of Lilly, and Zepbound, a weight loss drug.
Teresa Graham, head of Roche Pharmaceuticals, told the media that after obtaining encouraging results from the first phase of the trial, Carmot is ready to conduct the second phase of human trials. This drug may be launched after 2030.
Graham, the department head of Roche, stated that the company's goal is not only to develop a low-cost product to replace leading drugs in the market, but more importantly, CT-388 may become the best weight loss drug in the GLP-1 category, whether used alone or in combination with other drugs.
Graham said, "There is an opportunity to enhance weight loss effectiveness and accelerate weight loss speed, but tolerance may be one of the bigger issues."
The acquisition concept of GLP-1 weight loss pills is being hyped up
After the announcement of the Roche acquisition, the US stock market immediately hyped up this. On Monday Eastern Time, driven by news about weight loss pills, Roche's stock price closed up 3.08%, reaching a six week high.
At the same time, several small market value pharmaceutical stocks with ongoing GLP-1 weight loss drug research projects have also received hot speculation.
As of the close, Viking Pharmaceuticals (VKTX) rose 15.91% and Altimune rose 29.69%, with market capitalization of $1.5 billion and $250 million respectively.
Viking Pharmaceuticals is expected to release the second phase experimental results of the weight loss drug VK2735 in the first half of next year, while Altimune reported positive second phase results of the GLP-1R/GCGR dual agonist Pemvidutide last week.
Don't worry about the competitive pressure in the weight loss medication market
In the second half of this year, there were frequent acquisition transactions in the weight loss drug market. In July of this year, Lilly acquired the unlisted Versanis for up to $1.93 billion to further expand its weight loss drug product line; Last month, AstraZeneca agreed to purchase exclusive rights to the development and commercialization of oral GLP-1 weight loss products produced by Chinese biotech company Eccogene for up to $2 billion.
Under such fierce competition, will there be "more monks than porridge" in the diet drug market?
Wall Street clearly has more to it than that. Some analysts estimate that the global weight loss market will be as large as $100 billion.. Under such a large plate, there is no need to worry about competition from multiple companies leading to insufficient profit margins
Analysts at Zurich State Bank stated in their report:
"The market for weight loss pills is large enough to accommodate different products with similar effects, especially when the price is appropriate."