Roche Drops $3.1 Billion to Join Ozempic Craze

As Pfizer flames out, other big names are piling into a competitive GLP market

BREAKING NEWS

Swiss pharma titan Roche is making a massive splash by acquiring Carmot Therapeutics--an American manufacturer developing a new class of drugs similar to Ozempic. The GLP wars are really heating up. 

WHAT HAPPENED

Roche is buying Carmot at an honestly breathtaking $3.1 billion valuation. The main asset Roche is after here are 3 drugs that operate on a similar pathway to weight-loss blockbusters like Ozempic and Mounjaro. Two of Carmot's drugs are injectable therapies in Phase 2 trials, and one more is a pill that's still in Phase I trials. So Roche is spending a lot to potentially get access to revenue from this weight loss market in a few years.

WIDE OPEN MARKET

While Novo Nordisk and Eli Lilly have massive leads in this GLP race, Pfizer's pill therapy for this market just flamed out spectacularly in Phase II trials. Roche is locking in a pretty heavy acquisition at essentially the perfect time, given projections that the GLP market could be worth anywhere from $10 billion to $90 billion across the next decade. Should any of these drugs make it out of the clinical trial stage, Roche would have a huge opportunity to grab some wild upside. 

WHY IT MATTERS

This is a massive shift after Pfizer's GLP-1 pill didn't make it out of Phase II trials. Roche is paying a pretty high premium for Carmot here, but investors aren't punishing the company too much for it. This is a bold move for new CEO Thomas Schinecker as he forges a new path for Roche. Get ready for even more competition as Eli Lilly's weight-loss formulation for Mounjaro hits the market sometime in the next few weeks. For now, Roche stock rose 2% in European markets despite how high-risk this valuation is for Carmot. Novo Nordisk and Eli Lilly stayed flat on the news.