Roche and Zealand in multibillion pound deal to transform obesity drug sector

Swiss pharmaceutical giant Roche has finalised a £4.4 billion deal with Danish biotech firm Zealand Pharma to develop and commercialise a next-generation obesity treatment. The agreement focuses on Petrelintide, a weekly injectable drug targeting weight loss. This collaboration marks a significant step in expanding Roche’s pipeline for a market projected to exceed £82 billion by the 2030s.

Petrelintide mimics the pancreatic hormone amylin, which helps regulate hunger by inducing a faster sensation of fullness. Clinical trials have demonstrated promising results, with an 8.6 per cent average weight loss over 16 weeks, compared to 1.7 per cent for placebo groups. Analysts from Bank of America suggest that Petrelintide has the potential to be “best in class” amongst obesity drugs, showcasing its robust prospects for reshaping the competitive weight-loss sector.

The partnership grants Zealand Pharma £1.38 billion in a cash upfront payment, with potential milestone earnings raising the total value of the deal to £4.4 billion. Roche will manage manufacturing and supply while Zealand retains a profit-sharing arrangement in the United States and Europe, alongside royalties from other global markets. Zealand will also contribute £292 million towards Roche’s existing drug development assets, with the sum deducted from milestone payouts.

This deal comes amid a surge in interest within the pharmaceutical industry to innovate obesity treatments, an area predominantly led by Novo Nordisk and Eli Lilly. Current market leaders, such as Novo’s Wegovy (semaglutide) and Eli Lilly’s Zepbound (tirzepatide), face competition as next-generation drugs like Petrelintide enter the pipeline. Industry analysts have predicted annual worldwide sales for Petrelintide could exceed £8 billion by 2038, highlighting its commercial and therapeutic potential.

Zealand Pharma’s Chief Executive, Adam Steensberg, emphasised the significance of the drug within the evolving obesity treatment landscape. He stated that Petrelintide could serve as a cornerstone therapy for addressing the medical needs of a growing population grappling with obesity, whether as a stand-alone treatment or in combination with other agents.

Both Roche and Zealand have seen strong market responses following the deal’s announcement, with Zealand Pharma’s shares surging by 38 per cent in Copenhagen, while Roche experienced a smaller yet notable increase of 3.6 per cent. This collaboration underscores the intensified competition to dominate a potentially transformative market within global healthcare.