UPDATE: Roche muscles in on obesity market with $2.7B Carmot buyout, securing injectable and oral assets

Roche is paying $2.7 billion upfront to enter the obesity market. The takeover will give Roche control of Carmot Therapeutics, a biotech with injectable dual GLP-1/GIP receptor agonists and an oral GLP-1 drug in clinical development.  

Carmot is developing three molecules that could challenge Eli Lilly, Novo Nordisk and the rest of the pack for the booming obesity and diabetes markets. The biotech filed to go public last month, outlining how it would use the cash to advance once-weekly and once-daily injectables, plus an oral small molecule, to phase 1b and 2 data drops in 2024 and 2025.

Carmot filed to go public to ensure it had all the resources needed to execute on its programs, Carmot CEO Heather Turner told Fierce Biotech this morning. However, the biotech had also been in talks with Roche for a few months—conversations that Turner said occurred “in parallel” with the IPO plans, a strategy often referred to as a dual track process.

While Turner said Carmot had been regularly in discussion with other companies about possible opportunities, she declined to comment on any other potential offers.

Ultimately, Carmot ditched plans to brave the chilly IPO waters and instead is taking the Roche road, accepting a buyout bid worth $2.7 billion upfront plus up to $400 million in milestones. The deal is a big win for investors in Carmot, which has raised $384.8 million to date.

Turner, who previously stressed the importance of Fierce 15 winner Carmot’s commitment to patient accessibility to treatment, highlighted Roche’s ability to compete in the current global obesity market.

Andrew Baum, an analyst at Citi, foresaw Roche’s move into obesity. On a quarterly results conference call in October, the analyst noted that Roche had expanded into cardiology and that its anti-myostatin antibody, RO7204239, could pair well with an incretin and support an expansion into obesity. Roche CEO Thomas Schinecker’s response offers insights into the thinking behind the Carmot acquisition.

As Schinecker explained, Roche is studying the potential for its anti-myostatin antibody to strengthen the muscles of people with spinal muscular atrophy (SMA). While SMA was the focus at that time, the Roche CEO acknowledged how ownership of a drug that could support muscle development was shaping the company’s thinking about the obesity opportunity.

“The GLP-1s and the GLP-1/GIP incretins have one big problem. And this problem is muscle loss. So it's an option that we are looking at how this antibody can play a role there in the future,” Schinecker said.

Carmot’s attempt to differentiate its candidates from the competition rests on “biased signaling” that is designed to minimize recruitment of ß-arrestin. The approach is intended to achieve greater weight loss and glycemic control, plus a more favorable tolerability profile.

Buying Carmot positions Roche to have a role in the obesity market, both as the provider of single-agent drugs to support weight management and potentially as the developer of combinations that help people to lose weight while maintaining or increasing muscle mass. That could be important because some of the weight loss in recipients of Novo’s semaglutide and Lilly’s tirzepatide is driven by loss of lean mass.  

In a statement disclosing the deal, Turner noted the “potential for combinations.” To unlock those opportunities, Roche will need to validate Carmot’s clinical pipeline of subcutaneous and oral incretins. The once-weekly and once-daily injectables, CT-388 and CT-868, are the most advanced assets, with Carmot aiming to release phase 2 data in the second half of 2024 and sometime in 2025.

The third candidate, the oral small molecule CT-996, is in phase 1. Carmot shared pharmacokinetic data that support once-daily dosing in October. The biotech’s schedule includes additional phase 1 data in the first half of 2024 and topline phase 1b data in type 2 diabetes in the second half of next year.

Turner anticipates that all existing clinical timelines remain on track, noting that operations are expected to be minimally impacted by the deal. Carmot employees will join Roche’s pharmaceuticals division and Turner said she will take on an operational leadership role at the Big Pharma. The deal is set to close in the first quarter of 2024.

Editor's note: This article was updated at 12 p.m. ET Dec. 4 to include commentary from Carmot CEO Heather Turner.