Roche to Buy Obesity Drug Maker Carmot for $3.1 Billion

(Bloomberg) — Roche Holding AG agreed to pay as much as $3.1 billion for Carmot Therapeutics Inc., a developer of a new type of weight-loss treatment that’s sparked a pharma industry gold rush.

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The deal for three experimental medicines in obesity and diabetes could push the Swiss drugmaker into competition with European rival Novo Nordisk A/S, whose drug Wegovy has fueled the Danish pharma player’s growth into the most valuable company in Europe.

Roche, which has come under pressure to improve its pipeline with new medicines, agreed to pay $2.7 billion at first for Carmot and up to $400 million in milestones, it said in a statement on Monday.

Though Carmot’s drugs are still in early stages of development, the deal could lead to a competitor to the likes of Wegovy and Eli Lilly & Co.’s Zepbound. Analysts estimate that the weight-loss market could reach $100 billion by the end of the decade.

Roche is joining a race by global pharma giants to get into that business, with Pfizer Inc. working on a weight-loss pill and AstraZeneca Plc signing a licensing deal with Chinese drug developer Eccogene for another.

Roche rose as much as 2% in early trading in Zurich. The stock is one of the worst performers among European peers this year.

One Pill

Carmot’s lead experimental medicine is a weekly injection that’s ready to enter the second of three stages of clinical tests, meaning it’s still a few years away from reaching patients. But existing data “suggests a best-in-class potential to achieve and maintain weight loss with differentiated efficacy,” according to Roche.

One of the other two treatments as a pill, which drugmakers see as the next frontier for that treatment category. The assets could combine with another experimental Roche drug that preserves muscle mass. The portfolio could also have potential in other indications such as heart disease, Roche said.

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