Roche (RHHBY.US) will acquire 89bio (ETNB.US) for up to $3.5 billion to increase its presence in the weight loss drug market.

Roche (RHHBY.US) will acquire the biopharmaceutical company 89bio (ETNB.US) for up to $3.5 billion, in its latest move to enter the obesity drug and related therapy market. Roche stated that 89bio, headquartered in San Francisco, is developing innovative therapies for liver and cardiovascular metabolic diseases. A key late-stage drug in development is pegozafermin, which is expected to become the preferred treatment for moderate to severe metabolic dysfunction-associated fatty liver disease (MAFLD). MAFLD is one of the most common complications of obesity. When fat accumulates in the liver, it forms MAFLD, causing inflammation and potentially leading to more serious diseases such as cirrhosis and cancer. Roche will acquire 89bio for $14.50 per share in cash, with a total equity value of approximately $2.4 billion. In addition, shareholders will also receive a non-transferable contingent value right, which can be cashed out for up to $6.00 per share, making the total deal value potentially up to around $3.5 billion. 89bios latest closing price was $8.08, with a market value close to $1.2 billion. Roche is trying to catch up with Novo Nordisk A/S Sponsored ADR Class B (NVO.US) and Eli Lilly (LLY.US), where the latter two companies have produced blockbuster drugs Wegovy and Zepbound worth billions of dollars. Roche plans to accelerate the development of its experimental weight loss drugs, which have shown mixed results in smaller-scale trials, but are now moving towards the crucial final stages of clinical development. Roche's recent major deals have all been related to obesity. Earlier this year, the Basel-based company reached a $5.3 billion partnership agreement with Zealand Pharma A/S. Previously, the company acquired Carmot Therapeutics Inc. for $3.1 billion in 2023. Earlier this year, Roche also hired Morten Lammert, a senior executive from Novo Nordisk A/S Sponsored ADR Class B, as the Chief of Global Cardiovascular, Renal, and Metabolic Areas to help the company enter the obesity treatment market. The 89bio transaction is expected to be completed in the fourth quarter of 2025.