Competitive Edge: Can Roche Succeed in the Weight Loss Drug Industry?

The original sentence: "A version of this article first appeared in CNBC's Healthy Returns newsletter, which brings the latest health-care news straight to your inbox. Subscribe here to receive future editions." Rewritten sentence: "This article was initially published in CNBC's Healthy Returns newsletter, providing you with the latest health-care news directly to your inbox. To receive future editions, subscribe here."

Good afternoon! is among several pharmaceutical companies aiming to enter the lucrative weight loss drug industry, which is currently dominated by and .

But can the Swiss company develop drugs that can compete with that duopoly?

The answer isn't clear yet.

Roche will likely need to conduct longer and larger clinical trials to obtain more data, which may take years.

Last week, the company presented more early-stage data on its experimental obesity injection and pill, which raised concerns among some analysts about the competitiveness of those products if they enter the market.

According to some analysts, the new findings revealed that both drugs, acquired by Roche through its $3 billion acquisition of Carmot Therapeutics in December, resulted in a higher rate of side effects than anticipated.

Roche's obesity franchise may experience a decrease in investor excitement due to the higher-than-expected gastrointestinal side effects of the acquired drugs, according to Jefferies analysts. The analysts noted that the trials involved increasing patients' dosages of the drug aggressively.

On Wednesday, Roche disclosed tolerability data from a phase one trial of its oral drug, CT-996, which is being developed to treat obesity and diabetes. The drugmaker previously stated that the once-daily obesity pill helped patients lose up to 7.3% of their weight within four weeks compared to 1.2% among those who received a placebo.

The rapid dose increases in the weight loss drug are driving the competitive aspect, resulting in a high frequency of gastrointestinal side effects, according to Jefferies analysts. However, they pointed out that these side effects could be reduced by a more gradual dosage ramp-up.

The true competitive profile of the drug will not be visible until the presentation of data from larger phase two trials, according to analysts.

JPMorgan analysts expressed concerns in a Wednesday note about the ability to reduce the high rates of gastrointestinal side effects.

Despite receiving the lowest maximum dose of the pill, 90 milligrams, the patients still experienced high rates of nausea with limited weight loss efficacy, according to the analysts.

JPMorgan analysts found that a group of patients who took the highest maximum dose of the drug, 120 milligrams, had nausea rates of 83%, vomiting of 33%, and diarrhea of 50%. They concluded that the tolerability of the drug under that dosing approach "looks uncompetitive."

The rates observed are significantly higher than those seen with Novo Nordisk's oral semaglutide, Eli Lilly's obesity pill, orforglipron.

The purpose of the study on the pill was to quickly identify any safety or efficacy issues that may arise, according to Manu Chakravarthy, head of product development for cardiovascular, renal and metabolic at Roche, who spoke on CNBC's "Fast Money" on Thursday.

He observed that the company accelerated the titration scheme "a little bit" in later-stage trials.

Roche's pill, which mimics a hormone in the gut called GLP-1 to suppress appetite and regulate blood sugar, has rates of gastrointestinal side effects that are "very much in line" with other drugs of the same class.

Roche plans to start mid-stage studies in 2025, which gives us confidence to move the program forward into phase two, as nothing unexpected was seen in safety, Chakravarthy stated.

According to Chakravarthy, both products demonstrated similar weight loss trajectories, even with slower or lower dose increases, which is why Roche doesn't believe slowing down titration will make the company's injection or pill less effective.

Chakravarthy stated to CNBC that slowing down the titration would likely enhance accountability even more.

Roche's CT-388 injection helped patients with obesity lose 18.8% more weight compared to placebo recipients in a phase one trial, and the company hopes to demonstrate 25% weight loss in late-stage trials, according to Chakravarthy.

Rewritten sentence: Please provide any tips, suggestions, story ideas, and data to Annika at [email protected].

Oura has entered the metabolic health market through the acquisition of Veri.

Oura, a smart ring maker, is expanding its offerings beyond sleep, exercise, and stress tracking into the metabolic health market.

Last week, Oura announced that it had agreed to acquire Veri, a company that utilizes continuous glucose monitors to aid users in maintaining a healthier diet and losing weight. The specifics of the deal were not made public by Oura.

A CGM is a small sensor that monitors a user's real-time glucose levels by poking through the skin. Glucose, a sugar obtained from food, is the body's primary energy source. Although everyone's glucose levels fluctuate, consistently high levels can increase the risk of serious health issues such as metabolic disease, insulin resistance, and heart disease.

Over-the-counter versions of CGM sensors are now available from Abbott and Dexcom for adults who do not take insulin. These sensors are offered for less than $100 a month. Historically, CGMs have been prescribed to patients with diabetes.

The latest company to enter the market is Oura.

Oura CEO Tom Hale wrote in a blog post that expanding the company's smart ring to track metabolic health was a natural next step since around 97% of Oura members want to understand how their bodies respond to food.

Last year, the company had agreed to integrate its data into Veri through a partnership. As part of the deal, a "significant portion" of Veri's employees, including its founders, will join Oura. Existing Veri customers can use its platform through the end of the year.

Hale stated that Oura's acquisition of Veri is the first step in the company's plans to expand its presence in the metabolic health market.

He stated that our goal is to develop a personalized and actionable Oura experience by integrating other inputs, such as CGMs, into the ecosystem.

In the fall, Oura Labs will introduce a new feature called "Meals" that allows users to track their food intake and gain insights into how it affects their sleep, recovery, and stress.

Rewritten sentence: Please provide any tips, suggestions, story ideas, and data to Ashley at [email protected].