Early-stage weight loss drug study results disappoint, Roche (RHHBY.US) shares fall nearly 5%

Market VisionThursday, Sep 12, 2024 5:20 am ET

1min read

Zhitong Finance APP noticed that Roche's (RHHBY.US) stock price fell on Thursday after the company's early-stage weight loss drug candidate, which had been highly anticipated in the market, showed a high proportion of temporary side effects in human preliminary trials.

Its shares fell 4% at the opening of European markets on Wednesday evening after the company disclosed the trial details. A brief summary of the study's success in July had boosted the company's shares.

According to a report at the European Association for the Study of Diabetes meeting in Madrid, all 25 trial participants experienced mild or moderate side effects, or adverse events, including those who only took ineffective placebos.

The side effects of the drug, called CT-996, were mainly gastrointestinal (GI), as with similar drugs. CT-996 is part of the Carmot acquisition that Roche bought for $2.7bn in December.

Analysts at Barclays and Jefferies said the high number of adverse events reflected similar data in Roche's early-stage weight loss drug development, which have been seen in studies at most of the pharmaceutical companies except Novo Nordisk and Eli Lilly.

"We believe investor enthusiasm for Roche's weight loss business may now be on hold, given the high number of adverse events seen with both acquired assets, which showed higher than expected GI side effects," said a Jefferies analyst.

Roche said the efficacy of CT-996 was that obese non-diabetic patients taking the drug once a day lost an average of 6.1 per cent of their body weight (adjusted for placebo) over four weeks.

The company said the first-stage trial followed the convention of increasing the drug dose, a process called titration, faster than planned in later-stage trials to quickly detect any unforeseen side effects.

Roche said the frequency of adverse events was "consistent with the rapid titration and early development."

The company said: "These data support the continued study of CT-996 in longer duration, larger sample size and slower titration."

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