Shares in Roche (RHHBY (OTC:RHHBY)) gained more than 4% in European trading on Thursday after an early-stage trial revealed significant weight loss from the recently acquired Carmot Therapeutics' obesity drug candidate, CT-388.
The Swiss drugmaker reported that the phase one trial showed an 18.8% weight loss, adjusted for a placebo effect, after 24 weeks in healthy adults with obesity.
Roche acquired Carmot for $2.7 billion upfront in December, joining the competition against weight-loss drug leaders Novo Nordisk and Eli Lilly.
CT-388, a once-a-week injection, mimics the effects of gut hormones GLP-1 and GIP, similar to Lilly's Mounjaro (Zepbound).
With the obesity drug market potentially reaching $100 billion, even early-stage trial results are significantly impacting share prices.
Jefferies analysts said the Phase I results in CT-388 are “encouraging, but questions remain given the highly competitive market before commercial potential can be assessed, and whether Roche's move into cardiovascular is astute or costly.”
“We await details on dose titration, tolerability profile, and weight loss curve. Expect shares to uptick today, but there is still a long road ahead, and R&D productivity concerns linger,” they added.