Zealand Pharma and Generate Biomedicines forge $1.2 billion AI drug partnership for obesity treatments

Zealand Pharma and Generate Biomedicines Launch Major AI Drug Partnership

Zealand Pharma and Generate Biomedicines have entered a strategic collaboration to develop AI-driven protein-based treatments for obesity and metabolic diseases, marking a significant expansion in pharmaceutical innovation.1

1

The AI drug partnership, announced Tuesday, is valued at nearly $1.2 billion in total milestone payments and combines Zealand Pharma's metabolic health expertise with Generate Biomedicines' generative AI platform.2

2

Under the agreement, Generate Biomedicines will receive a $30 million upfront payment and up to $35 million in early preclinical milestones for two initial programs.3

3

The Somerville, Massachusetts-based company is eligible for nearly $1.2 billion in development, regulatory, and commercial milestone payments, plus tiered royalties on future worldwide net sales of any commercialized products.4

4

The collaboration also includes an option to add a third program beyond the two initial development initiatives.

How the AI Drug Development Partnership Will Work

The partnership divides responsibilities strategically between both companies to maximize their respective strengths in AI drug development. Generate Biomedicines will lead research and drug discovery through lead-candidate selection using its proprietary generative AI platform, which combines computational protein design with large-scale laboratory testing.2

2

Zealand Pharma will then oversee clinical development, regulatory submissions, and worldwide commercialization of the AI-designed protein drugs.1

1

Generate CEO Mike Nally explained that the companies would first establish desired treatment profiles for the two initial programs, after which Generate would use its platform to design candidates meeting those objectives.2

2

This approach aims to develop multispecific protein therapeutics with biological functions tailored to specific treatment goals for obesity and metabolic diseases.

Strategic Expansion Into Protein Therapeutics

The AI drug partnership represents a significant expansion for Zealand Pharma beyond its traditional focus areas. "This collaboration expands our toolbox to include proteins, complementing our existing small-molecule and peptide capabilities," said Utpal Singh, Chief Scientific Officer at Zealand Pharma.3

3

The Danish company, founded in 1998 and headquartered in Copenhagen with a U.S. presence in Cambridge, Massachusetts, has more than 25 years of peptide therapeutics research experience.2

2

Zealand Pharma has successfully advanced more than 10 drug candidates into clinical development, with two products reaching the market and three candidates currently in late-stage development.3

3

The addition of AI-engineered protein therapies to its portfolio positions the company to address the booming obesity market with innovative treatment approaches that target multiple biological pathways simultaneously.

Generate Biomedicines' AI Platform Technology

Generate Biomedicines, founded in 2018, integrates machine learning with biological engineering to develop protein-based therapeutics across multiple therapeutic areas.3

3

The clinical-stage company's technology platform uses generative artificial intelligence to design multispecific protein therapeutics, enabling the creation of novel drug candidates that might be difficult to discover through traditional methods. Following the announcement, Generate Biomedicines shares rose approximately 5% in extended trading, reflecting investor confidence in the partnership's potential.1

1

The collaboration marks Generate's strategic expansion into obesity and metabolic diseases while providing Zealand Pharma access to cutting-edge AI drug development technologies.2

2

Ropes & Gray LLP acted as legal advisor to Generate, while Cooley LLP advised Zealand Pharma on the transaction.3

3

Implications for the Obesity Treatment Market

This AI drug partnership positions both companies to compete in the rapidly expanding obesity therapeutics market. By combining Zealand Pharma's established expertise in peptide therapeutics and metabolic disease with Generate Biomedicines' computational platform and experimental capabilities, the collaboration aims to address unmet medical needs for patients with cardiometabolic disease.4

4

The focus on multispecific protein therapeutics could yield treatments that offer advantages over existing single-target approaches, potentially delivering more comprehensive metabolic benefits for patients struggling with obesity and related conditions.