Roche appreciates 5.8% on promising oral anti-obesity data

NEWS. Roche finished Wednesday 5.8% up, corresponding to more than USD 16 billion in market cap, after disclosing Phase 1 data from CT-996 in obese patients, showing 7.3% weight loss (6.1% placebo-adjusted) after four weeks of treatment. Importantly, there were no treatment discontinuations, and according to the company the compound’s side effect profile is in-line with other similar molecules.

BACKGROUND. Roche entered the obesity field at the end of 2023 by acquiring Carmot Therapeutics for USD 2.7 billion with three clinical drug candidates. One of them, CT-996 is an oral small molecule targeting GLP-1, the same peptide as Novo Nordisk’s semaglutide (brand name: Wegovy, Ozempic).

COMPETITION. Although only limited data was disclosed this time, CT-996 compared favorably to peers. As an oral drug it is thought to be more convenient than injectables and as a small molecule it is easier and cheaper to manufacture than (oral) peptides, which are more complex chemical constructs built from amino acids.

More specifically, CT-996 apparently led to a numerically larger and more rapid weight loss than Viking Therapeutics’ GLP-1/GIP agonist oral peptide (5.3% weight loss in 4 weeks, 3.3% placebo-adjusted). However, Viking’s drug has a clean safety profile, while Roche did not disclose any further details on the side effects of CT-996. Roche’s drug also compares favorably to Eli Lilly’s orfoglipron and Structure Therapeutics’ GSBR-1290, that showed a 6-8% weight loss in 12 weeks. Additionally, competition is expected to intensify among oral small molecules aiming to treat obesity, as other large companies including AstraZeneca, Pfizer and Gilead are also working on similar drugs, not to mention several smaller biotech companies like Terns Pharmaceuticals, that also plan to establish themselves in the field of obesity.

UNCERTAINTIES. While comparing drugs across different clinical trials can be useful, this exercise comes several caveats. We do not know much about dose escalation in Roche’s trial - that is how frequently and to what extent did the company increase the dose during the trial – which varies trial by trial and can substantially affect the results. Additionally, no details on the side effect profile were disclosed, but Roche will present it at a medical conference, which will further clarify the picture.

CONCLUSION. To sum up, this announcement came at a favorable time for Roche. After multiple clinical setbacks in the last couple of years these favorable early results are a step towards restoring investor confidence in the company’s drug development capabilities.