Roche has agreed to acquire Carmot Therapeutics for up to $3.1 billion, the companies said today, in a deal that catapults the buyer back into the scramble among biopharmas to develop new obesity drugs, a specialty that has proven lucrative in recent years.

Through the deal, announced early Monday, Roche will gain three clinical candidates designed to treat obesity in patients with and without diabetes. Of Carmot’s three clinical candidates, the furthest advanced is CT-388, a weekly injectable, Phase II ready, dual GLP-1/GIP receptor agonist indicated to treat obesity in patients with and without type 2 diabetes.

Also in Carmot’s pipeline is CT-996, a Phase I once-daily oral, small molecule GLP-1 receptor agonist intended to treat patients with obesity and type 2 diabetes; and CT-868, a Phase II once-daily subcutaneous injectable, dual GLP-1/GIP receptor agonist intended for the treatment of type 1 diabetes patients who are overweight or with obesity.

“A health problem of this magnitude requires significant commitment and resources to address, and we believe that patients will be best served with Carmot’s pipeline backed by the drug development expertise, extensive resources and worldwide reach of Roche,” Tim Kutzkey, PhD, chair of Carmot’s board of directors, said in a statement.

Roche is counting on at least one of the three Carmot clinical candidates to emerge as a rival to blockbuster treatments such as Novo Nordisk’s adult type 2 diabetes drug Ozempic® (semaglutide) and obesity drug Wegovy® (semaglutide injection) and Eli Lilly’s type 2 diabetes drug Mounjaro® (tirzepatide), whose active ingredient just last month was approved to treat obese or overweight adults under the name Zepbound®.

During the first three quarters of this year, sales of Ozempic jumped 53%, to DKK 65.663 billion ($9.524 billion) from DKK 42.774 billion ($6.204 billion) in January–September 2022, after zooming 77% all of last year, to DKK 59.750 billion ($8.509 billion) from DKK 33.705 billion ($4.8 billion) in 2021.

Wegovy sales multiplied nearly six-fold during Q1–Q3 2023, to DKK 21.729 billion ($3.151 billion) from DKK 3.742 billion ($542.7 million) in the first nine months of 2022. Wegovy finished 2022 with sales of DKK 6.188 billion ($897.5 million), nearly 3.5 times the DKK 1.386 billion ($201 million) Novo Nordisk racked up in 2021.

Morningstar has projected that sales of Ozempic will rise to earn $19.3 billion in 2027 and about $20 billion in 2030. Lilly’s Mounjaro® (tirzepatide) future sales have been pegged even higher at $21.2 billion in 2027, while Wegovy, a next-gen once-weekly injection version of semaglutide approved in 2021, is projected to earn $12.5 billion in 2027.

Mounjaro has already reached blockbuster status, with January–September 2023 revenues of $2.958 billion, nearly 15 times the $203.2 million garnered in the comparable nine-month period last year. Nearly half of this year’s total, $1.409.3 billion, was generated during the third quarter alone. (For all of last year, Mounjaro generated $482.5 million in revenues.)

Based in Berkeley, CA, Carmot focuses on developing drugs for metabolic diseases that include obesity and diabetes, as well as Prader-Willi syndrome, the disease targeted by Carmot’s sole disclosed preclinical candidate CT-PYY, a long-acting PYY analog delivered as an injectable peptide.

Earlier IPO filing

The deal comes just a month after Carmot filed a Form S-1 Registration Statement to carry out an initial public offering (IPO) whose proceeds were expected to go mostly toward advancing its clinical pipeline—through the filing left exact amounts, including number of shares, price, and proceeds—blank.

According to the filing, Carmot finished the nine months ending September 30 of this year with a net loss of $41.1 million, up from a net loss of $28.6 million for the year-ago period. Carmot reported a net loss of $38.8 million for 2022, but net income of $25.4 million in 2021.

As of September 30, 2023, Carmot had an accumulated deficit of $109.5 million, cash and cash equivalents of $125.9 million, as well as marketable securities of $120.5 million.

Roche agreed to pay $2.7 billion upfront for Carmot, as well as up to $400 million tied to achieving milestones.

The deal is set to close in the first quarter of 2024, subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.

“We are proud of the pipeline that we have built in obesity and diabetes and the strong data we have generated to date,” stated Heather Turner, JD, Carmot’s CEO. “With distinct routes of administration and the potential for combinations, we feel Carmot’s pipeline has the potential to meet patients where they are in their metabolic journey and have a significant impact on patients’ lives. We are confident that Roche will enable robust development of our programs and help us achieve our goal of delivering life-changing therapeutics for people living with metabolic and potentially other diseases.”

Previous article2023 Year in Review: An Exciting Moment in CRISPR-Land
Next articleTargeting the Androgen Receptor More Effectively in Prostate Cancer