Roche is buying Carmot to enter anti-obesity market

Roche Holding AG Genussscheine (SWX: ROG) says it will acquire Carmot Therapeutics for $2.7 billion in cash. Its shares are up 3.0% at writing.

Why is Roche buying Carmot Therapeutics?

Shareholders of the biotechnology company may also receive another $400 million subject to reaching certain milestones.

Roche is interested in buying Carmot Therapeutics primarily to secure a footprint in the rapidly growing market for anti-obesity drugs. Levi Garraway – its Chief Medical Officer said in a press release on Monday:

The news arrives shortly after Roche reported a 3.0% year-on-year hit to its sales in the third quarter due to currency headwinds and a decline in COVID product sales.

Roche is committed to oral anti-obesity drugs

Teresa Graham – the Chief Executive of Roche Pharmaceutical also expressed confidence today that the Swiss firm will eventually “figure out” a way to deliver obesity drugs orally.

It may, however, take years to achieve that milestone, she added.

Note that Carmot’s CT-388 has already shown promising results in a Phase 1 study – and is now to be tested in humans. But it’s a once-a-week “injection”. The CT-996, on the other hand, is a once-daily “oral” candidate – but it’s currently in Phase 1 only.

According to Goldman Sachs Research, anti-obesity medications or AOMs is a market that could be worth about $100 billion by the end of this decade versus $6.0 billion at writing.