RHHBY Enters Into a $5.3B Deal With Zealand Pharma for Obesity Drug

Roche RHHBY announced that it has entered into an exclusive collaboration and licensing agreement with Zealand Pharma for an obesity candidate.Per the terms of the agreement, both companies will develop and commercialize petrelintide, Zealand Pharma’s amylin analog, as a standalone therapy and in a fixed-dose combination with Roche’s lead incretin asset CT-388.Shares of Roche have risen nearly 26% compared against the industry’s 3.4% decline.Image Source: Zacks Investment ResearchMore on RHHBY’s Deal With Zealand PharmaPer the terms of the agreement, RHHBY will make upfront cash payments of $1.65 billion to Zealand Pharma. This amount 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 the initiation of phase III studies with petrelintide monotherapy, and sales-based milestones of $2.4 billion. The total consideration payable to Zealand Pharma amounts to $5.3 billion.The profits and losses for both standalone petrelintide and petrelintide/CT-388 will be shared equally in the United States and Europe. Zealand Pharma is eligible to receive tiered double-digit royalties going up to high teens on net sales in the rest of the world.In lieu, Zealand Pharma will pay Roche $350 million. This amount can be offset 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 be closed in the second quarter of 2025.Zealand Pharma Deal Complements RHHBY’s Portfolio of CVRMPetrelintide is a long-acting amylin analog suitable for once-weekly subcutaneous administration. The candidate is currently in phase IIb studies. ZUPREME-1 is evaluating petrelintide in overweight people without type 2 diabetes (T2D) and was initiated in December 2024. ZUPREME-2 evaluates the drug in overweight people with T2D and is expected to be initiated in the first half of 2025.The clinical data available so far suggest that petrelintide has the potential to become a best-in-class amylin monotherapy, with improved tolerability compared to current obesity treatments, and expand into adjacent indications.Meawnhile, CT-388 is a once-weekly subcutaneous injectable, dual GLP-1/GIP receptor agonist being developed for the treatment of obesity and T2D.  It is currently being studied in phase IIb clinical studies in overweight people with and without T2D.Roche expects that the combination of petrelintide with its dual GLP-1/GIP receptor agonist CT-388 will further strengthen and expand its pipeline in the field of cardiovascular, renal and metabolic (CVRM) diseases.Roche is currently looking to augment its pipeline. It acquired privately owned Carmot Therapeutics for $2.7 billion and forayed into the lucrative obesity market. The acquisition added a differentiated incretin portfolio with three candidates — CT-388, CT-996 and CT-868 — to its pipeline.However, Roche is a pretty late entrant in the obesity market, which is currently one of the most lucrative spaces in the healthcare sector. The market is dominated by bigwigs like Novo Nordisk NVO and Eli Lilly LLY. The stupendous success of Eli Lilly’s Zepbound and Novo Nordisk’s obesity drug, Wegovy, puts the spotlight on the obesity space.Eli Lilly’s Zepbound witnessed a phenomenal uptake owing to solid demand.The FDA approved Weogovy in 2021 for chronic weight management in obese or overweight adults. Since the approval, sales of the drug have been rising consistently, driven by increased demand.Roche’s Zacks RankRoche currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Roche Holding AG (RHHBY): Free Stock Analysis Report Novo Nordisk A/S (NVO): Free Stock Analysis Report Eli Lilly and Company (LLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks