Weight-Loss Boom Gets a New Player as Roche Buys Biotech With Hunger Drug in Its Pipeline

Roche Holding will buy Carmot Therapeutics for as much as $3.1 billion, acquiring a lineup of clinical stage drugs intended to compete in the booming weight-loss market.

The Swiss pharmaceutical company will pay Carmot’s equity holders $2.7 billion in cash and as much as $400 million if certain milestones are hit, the companies announced Monday. The privately held Carmot's research and development portfolio includes a phase 2-ready glucagon-like peptide 1, or GLP-1. These are a class of drugs which not only improve blood sugar control but may also lead to weight loss.

The soaring popularity of GLP-1 drugs, which appear to curb hunger, have been part of a boom in “miracle” weight loss treatments. Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy — both spin-offs of drugs used to help manage type 2 diabetes — have received approval from the Food and Drug Administration for weight loss.

Roche’s shares were up 2.8% on Monday following the announcement. It has a market capitalization of $198 billion.

Clinical data for Carmot’s leading injectable GLP-1 drug has shown a “best-in-class potential to achieve and maintain weight loss with differentiated efficacy” for patients with and without type 2 diabetes, Roche said. An earlier phase medication in Carmot’s pipeline is an oral treatment for obesity and type 2 diabetes. 

“The obesity epidemic is a worldwide crisis and only continues to worsen. By 2035 it is estimated that nearly half the world’s population will be overweight or obese,” Tim Kutzkey, chair of Berkeley, Calif.-based Carmot’s board of directors, said in a statement. 

Novo Nordisk’s third-quarter prescription volume for GLP-1 medications grew 50% in the U.S. Explosive sales of Wegovy and Ozempic helped Novo Nordisk overtake Louis Vuitton as Europe’s most valuable public company. 

The new wave of weight loss drugs are not without risks. Studies have found links between GLP-1s and stomach paralysis and intestinal blockages. They also potentially fuel eating disorders and stunt growth.