Roche Shares Slump on Oral Weight-Loss Drug Candidate Side Effects — Update
By Helena Smolak
Roche's stock fell after new data from an early-stage clinical trial of its closely watched oral weight-loss drug candidate prompted analysts to question the company's potential to quickly enter a booming obesity market.
Shares in the Swiss pharma giant fell 4.5% in early European trading. The stock has gained 5% year to date, having jumped 7% in July after Roche said the once-daily drug, acquired through its $3 billion-plus Carmot Therapeutics deal, helped patients lose 7.3% of their body weight within four weeks.
Roche revealed tolerability data of its oral weight-loss drug Phase 1 study, known as CT-996, and being developed to treat both Type 2 diabetes and obesity, late Wednesday at the European Association for the Study of Diabetes meeting in Madrid.
The company said the drug was generally well tolerated, but some patients showed gastrointestinal side effects that were consistent with similar drugs at an early stage of development.
However, analysts said the latest data could lead to questions about the drug's efficacy and a safety profile that was worse than that of competitors, which they attributed to rapid dose increases, or titration.
"Investor excitement for Roche's obesity franchise may now take a pause, in our view, given both acquired assets [oral and injectable candidate] showed higher-than-anticipated gastrointestinal side effects, albeit both underpinned by aggressive titration schedules," Jefferies analysts said in a note to clients.
The competitive weight loss that Roche's drug candidate achieved seemed to be driven by rapid dosage, and its true competitive profile isn't yet visible, Jefferies added. UBS analysts said they expected the drug's lead in efficacy to be questioned.
Vontobel analyst Stefan Schneider expects the company will need to work on the drug's dosing schedule, potentially also for its injectable weight loss drug candidate, in a Phase 2 study, which could lead to a delay of the drug launch.
A lower and slower dose increase won't delay the launch of both its oral and injectable drug candidates as the company's timeline already accounts for adjustments, Manu Chakravarthy, Roche's head of product development for cardiovascular, renal and metabolic, said in an interview. The company's primary objective for the Phase 1 trials was early de-risking, whereas Phase 2 would focus on dose optimization to achieve the best tolerability-efficacy ratio to move in a late-stage trial, he said.
Roche--which is due to start a Phase 2 study in 2025--said data from the first trial supported the continued investigation of the drug with studies of longer duration with larger sample sizes and slower dosing.
Write to Helena Smolak at helena.smolak@wsj.com
(END) Dow Jones Newswires
September 12, 2024 06:59 ET (10:59 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
What’s Happening in the Markets This Week
-
Worst-Performing Stock ETFs of the Quarter
-
Q3 in Review and Q4 2024 Market Outlook
-
Top-Performing Stock ETFs of the Quarter
-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
3 Dividend Stocks for October 2024
-
Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue
-
Industrials: Many Stocks Overvalued After Q3 Outperformance
-
Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities
-
What the Election Could Mean for Big Tech Stocks
-
3 Lessons From Recent Stock Market Drama
-
Consumer Cyclicals: Even Amid Moderating Consumer Spending, We See Discounts
-
Healthcare: Valuations Look Fair Overall, With Select Industries Still Undervalued