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The head of Zealand Pharma has called its $5.3bn partnership with Roche to commercialise an obesity drug with fewer side-effects the “best deal ever”, saying it will help preserve the Danish biotech group’s independence.
Adam Steensberg, Zealand’s chief executive, said the deal with the Swiss pharmaceutical company announced last month would help the company become a “generational biotech” that would not have to sell itself.
Steensberg said that conversations with potential partners — “pretty much all the large pharma companies” — on its new drug, petrelintide, began last September. It took until March to agree the deal with Roche.
Petrelintide is based on the gut hormone amylin that makes you feel fuller for longer. The companies will develop it as a standalone drug and as a combination with Roche’s potential obesity drug, which works in a more similar way to weight-loss drugs already on the market based on the gut hormone GLP-1.
Steensberg said Roche chief executive Thomas Schinecker had convinced him that the company was committed to becoming a leader in the obesity field, which is currently dominated by Novo Nordisk and Eli Lilly. Earlier this week, Zealand announced Utpal Singh, a former Lilly executive, as its new chief scientific officer.
Many other companies have been buying early-stage potential obesity drugs.
“We didn’t just want to hobnob with a CEO from another company who just wanted to say: I am in obesity,” Steensberg told the Financial Times.
Roche will split profits 50/50 with Zealand, and Zealand will also receive half the value of a planned product combining petrelintide with a drug that Roche acquired as part of a $3.1bn deal to buy Carmot Therapeutics in 2023. Roche will carry the cost of building manufacturing facilities.
On the day the Roche deal was announced, shares in Zealand rose as much as 40 per cent. But they have now lost about 40 per cent in the wider market sell-off of recent weeks.
Studies have shown amylin-based weight-loss drugs can cause fewer side effects than drugs based on GLP-1.
In an early study of petrelintide, a smaller percentage of patients experienced the side effect of nausea often associated with GLP-1 based drugs. Patients also lost less weight, but the trial was over a shorter period than many GLP-1 studies.
Petrelintide is now being tested in two mid-stage trials and is unlikely to be on the market before 2029 or 2030. By this point, the patents on Novo Nordisk’s Ozempic and Wegovy drugs will have expired or be about to expire in many markets, meaning Zealand’s drug may have to compete with much cheaper generic GLP-1 versions.
Steensberg believes the demand will be so great that there will be space in the market for a number of options, particularly if petrelintide causes fewer side-effects. He added that having cheaper GLP-1 drugs would free up healthcare budgets to spend on petrelintide.
He also pointed to data highlighting the extent of the obesity problem: the US Institute for Health Metrics and Evaluation found that 5mn people died because of obesity in 2019, compared with about 3.5mn from Covid-19 in 2021.
“Obesity is killing more people . . . than corona did in the peak years,” he said.
