By Adria Calatayud and Dominic Chopping

Roche Holding said its weight-loss drug candidate achieved positive results in an early-stage trial, giving the company a boost in its bid to catch up to Novo Nordisk and Eli Lilly in a class of medicines that has shaken up everything from pharma to snack companies.

The Swiss drug giant joined the race for drugs to treat obesity and diabetes through its $3-billion-plus purchase of Carmot Therapeutics. Roche announced that deal late last year as a step toward capturing a slice of the booming weight-loss drug market, alongside competitors such as Wegovy- and Ozempic-maker Novo Nordisk and Eli Lilly, which makes Mounjaro and Zepbound.

An obesity drug candidate Roche bought as part of the Carmot deal--known as CT-388--showed positive results in a phase 1 study, by leading to significant weight loss in healthy adults with obesity compared to placebo, the company said Thursday.

Phase 1 trials are early-stage tests. While the data looks encouraging, Roche has still a long way to go and more details are likely needed to assess the drug's position and commercial potential in a highly competitive market, Jefferies analysts wrote in a note to clients.

Roche shares, nonetheless, rose more than 3% in European afternoon trading.

The drug candidate, a once-weekly injectable under development for the treatment of obesity and type 2 diabetes, was well tolerated, and no new or unexpected safety signals were detected, Roche said.

The results of the trial underscore the drug's potential to become a therapy with durable weight loss and glucose control, said Levi Garraway, Roche's chief medical officer and head of global product development.

Like Novo Nordisk's blockbuster Wegovy weight-loss drug, CT-388 works by mimicking a gut hormone known as GLP-1 to control blood sugar and suppress appetite. But the Roche treatment also mimics a second gut hormone, known as GIP, which is believed to enhance the effect.

This is the same dual-target approach to diabetes and weight-loss found in Eli Lilly's Mounjaro and Zepbound.

Investors are eager to reward companies that develop new candidates for the surging obesity market, which some analysts see reaching more than $100 billion in annual sales, so even early-stage trial data can prove a boon for share prices.

"Roche's shares have been considerably weaker than many of its peers, hence why today's big news is being touted as a potential turning point for the stock," said Russ Mould, investment director at AJ Bell.

Novo Nordisk shares rose over 8% to what was a fresh all-time high in March after it said a Phase 1 trial of its Amycretin pill showed weight loss of around 13% after 12 weeks, better than the 6% weight loss patients experienced after 12 weeks in a Wegovy trial.

Viking Therapeutics had a similar sized share-price reaction to early trial data of its experimental obesity pill when patients on the highest dose lost 5.3% of their body weight after 28 days, while in a later stage trial of the injected version of the drug patients lost 14.7% of their weight in just 13 weeks.

As competition heats up in the weight-loss market, companies are working on pill forms of the drugs to stay ahead of the market, as these are both easier to manufacture and for patients to take. They are also already developing the next generation of treatments, combining active ingredients in their current jabs with other drugs to turbocharge weight-loss effects.

Novo Nordisk's CagriSema is being touted as a successor to Wegovy as the injectable drug combines the active ingredient in Wegovy, semaglutide, with another medicine called cagrilintide. It is currently in a Phase 3 trial, having already shown greater blood-sugar control and weight-loss benefits in diabetic patients than those treated with only semaglutide or cagrilintide.

At the same time, a mid-stage study of Eli Lilly's Retatrutide drug has shown patients on the highest dose of the drug lost 24% of their body weight over 48 weeks. That compares to the 18% average weight loss for patients on Zepbound after 72 weeks.

Retatrutide targets GLP-1 and GIP hormones to suppress appetite and keep patients feeling full for longer, but also targets a third hormone known as GCG which is thought to boost calorie burning by speeding metabolism.

Write to Adria Calatayud at and Dominic Chopping at

(END) Dow Jones Newswires

05-16-24 0802ET