Zealand Pharma’s Obesity Ambitions Get $5.3bn Boost from New Roche Partnership

Zealand Pharma’s transformational journey from a niche biotech to a commercial-stage player in the booming global obesity market has reached another major milestone. As part of a USD 5.3 billion partnership with pharma giant Roche, Zealand will receive a USD 1.65 billion upfront payment, with Roche set to deliver Zealand’s Petrelintide (ZP8396) as a potential next-generation weight-loss therapy.

In 2022, the Danish company made the decision to bring in Adam Steensber – formerly executive vice president of R&D and chief medical officer – as new CEO following an underperforming launch of their first product, Zegalogue, a treatment for severe hypoglycaemia in diabetes patients. As part of his strategic revamping, Steensber chose not only to fully restructure Zealand’s commercial organisation, reverting back to its original partnership approach, but also to focus on obesity.

The Strategic Partnership

Under the agreement, Zealand and Roche will co-develop and co-commercialise petrelintide as both a standalone therapy and in combination with Roche’s own lead obesity asset, CT-388 – a GLP-1/GIP receptor agonist (RA). GLP-1RA therapies help lower blood sugar and promote weight loss by mimicking GLP-1 hormones produced after eating, which increase the release of insulin in the pancreas – reducing appetite and slowing digestion.

The companies will share commercialisation responsibilities in the U.S. and Europe with a 50/50 profit split while Roche maintains exclusive rights to commercialisation in the rest of the world. Additionally, Roche will oversee the product’s commercial manufacturing and supply, leveraging its global infrastructure to scale production.

In a press release announcing the partnership, Steensberg called the collaboration a “step change” for the company, emphasising that Roche’s global reach, complementary pipeline, and shared vision in obesity make it an ideal collaborator. “With relentless focus on innovation, a global manufacturing network and commercial reach, a complementary portfolio of clinical programs in obesity, and importantly a shared vision for petrelintide, we consider Roche the ideal partner for Zealand Pharma. This collaboration with Roche is a step change to realise this vision, while solidifying Zealand Pharma as a key player in the future management of obesity.”

A New Approach to Obesity Management

While Lilly and Novo Nordisk dominate the obesity market with their GLP-1RA therapies, Mounjaro and Wegovy respectively, Zealand and Roche are aiming to establish a new treatment mechanism—utilising amylin hormone replacement rather than GLP-1—which they hope will provide fewer side effects and improved patient adherence. According to Zealand Pharma’s 2024 annual report, despite their astounding growth, GLP-1-based treatments still face adherence challenges with high discontinuation rates. Studies indicate that up to 30 percent of patients discontinue GLP-1RA treatment within the first month and 60–70 percent of patients stop treatment within the first 12 months.

Therefore, the partners aim to redefine the standard of care for people with overweight and obesity by providing more choices to patients given the limited number of options on the market which are associated with common gastrointestinal side effects, such as nausea and vomiting. 

Teresa Graham, Chief Executive Officer of Roche Pharmaceuticals, stated, “we are excited to collaborate with Zealand Pharma and develop this promising therapy, which we hope will provide people living with obesity and related comorbidities a new treatment option.“

The Expanding Obesity Market and Future Outlook

GLP-1 based therapies have existed on the market for nearly 20 years – primarily used in the treatment of type 2 diabetes to help lower glucose levels and improve glycemic control. Over the last two years, GLP-1s have been drastically driven by their utilisation in the treatment of obesity through weight loss, transforming the obesity market into one of the fastest-growing sectors in healthcare. UBS forecasts that by 2030, upwards of 40 million people will be on GLP-1 medications globally, translating into an estimated USD 125–150 billion in sales. 

Today, only two GLP-1RA therapies are approved, and the surging demand for Novo’s Wegovy and Lilly’s Mounjaro has sparked interest among competitors to test their own weight-loss treatments. A joint report from Morningstar and PitchBook projects that 16 new weight-loss drugs could launch by 2029. 

Aside from Roche and Zealand, major pharmaceutical companies such as Boehringer Ingelheim, Pfizer, and Amgen are advancing their own obesity treatments, while biotechs like Structure Therapeutics, Viking Therapeutics, and Altimmune also strive to claim a piece of the obesity pie. Meanwhile, Novo Nordisk and Lilly continue to develop next-generation therapies in an effort to maintain their dominance.

As the obesity market continues to balloon, Zealand Pharma’s 2022 strategic pivot—and its biggest partnership to date—could be the defining moves that propel the Danish biotech into the ranks of the industry’s major players. Following the announcement of the partnership, Zealand Pharma shares jumped 38 percent while Roche shares closed 3.6 percent higher. Notably, Novo Nordisk’s shares dipped 4.3 percent, potentially indicating concerns over future competition.