Roche Holding expects the obesity market to split into segments as weight-loss drugs reach the wider public, opening the door for new players to take on Eli Lilly and Novo Nordisk.
“We are literally scratching the surface, and underneath that is a whole world of unmet needs that patients are desperately waiting for,” said Manu Chakravarthy, Roche’s global head of cardiovascular, renal and metabolism product development and one of the executives in charge of leading the pharmaceutical giant’s bid to re-enter the obesity market.
Roche was once among the pioneers in weight-loss drugs. But it exited the market before the so-called GLP-1s—the class of medicines which includes Lilly’s Zepbound and Novo Nordisk’s Wegovy—revolutionized the treatment of obesity.
The Swiss company turned to dealmaking for its comeback, assembling a portfolio of drugs for obesity and associated conditions. Roche expects the drugs to work as standalone treatments or in combination, and aims to become a top-three player in obesity.
More than 100 million adults have obesity in the U.S., according to the Centers for Disease Control and Prevention. Analysts at Goldman Sachs estimate 15 million U.S. patients will be on anti-obesity medications in 2030, with the market entering a consumer-driven phase due to the introduction of pills, price cuts and expanded access through Medicare.
Chakravarthy said that there won’t be a one-size-fits-all solution due to different needs in terms of how much weight patients want to lose, how they access and pay for medicines, and which chronic diseases they may have alongside obesity.
“The marketplace is going to be segmented. We know that, it’s already happening,” he said in an interview.
Lilly and Novo Nordisk dominate the market, but Roche’s history in the field dates back decades. In the 1990s, it developed an obesity treatment marketed under the brand name Xenical. After Xenical, Roche worked on drugs for metabolic and cardiovascular diseases, but halted development more than a decade ago. It was among the first to pursue products targeting the GIP hormone, and a dual GLP-1 and GIP agonist.
Japan’s Chugai Pharmaceutical—majority owned by Roche—outlicensed a type 2 diabetes drug candidate to Lilly in 2018. That drug is now Lilly’s orforglipron weight-loss pill. Analysts polled by Visible Alpha estimate orforglipron annual sales to peak at about $27 billion.
A Roche spokesman said portfolio decisions are made based on where to focus investments to maximize potential and benefit for patients.
Roche’s Chakravarthy said the company’s current foray into obesity began with a partnership with Alnylam Pharmaceuticals in mid-2023, which gave Roche access to an experimental treatment for hypertension, a condition associated with obesity.
Other transactions followed. Roche bought Carmot Therapeutics for up to $3.1 billion, which brought two drug candidates for obesity and another for type 1 diabetes with it. Roche struck a licensing deal of up to $5.3 billion with Zealand Pharma for another obesity treatment and bought 89bio for around $3.5 billion, acquiring a drug candidate for fatty-liver disease, a condition commonly associated with obesity. It is also testing a drug licensed from Chugai for muscle-mass preservation.
Among Roche’s obesity drugs, its CT-388 injection is the most advanced, with late-stage trials set to start during the first half. The company is looking to fast-track the drug, front-loading investment.
“People ask me this all the time: ‘Aren’t you too late into the game?’” Chakravarthy said. “We’ve been systematically trying to build out a portfolio and an approach that is very thoughtful, differentiated, patient-focused and holistic when you really think about where the core unmet needs are.”
One of the core unmet needs in obesity is how to keep weight that has been lost off for a long period of time. Roche is trying to better understand how to rewire the brain to ensure lasting weight loss, he added.
“Ultimately, obesity is a neurological or a brain disease,” Chakravarthy said. “We’re actively looking at science breaking ground in that area.”
Write to Adrià Calatayud at adria.calatayud@wsj.com