Zealand Pharma and Generate struck an AI obesity drug deal worth up to $1.2 billion on Tuesday. Generate will lead early research, while Zealand handles clinical development and commercialization. The companies said the collaboration focuses on multispecific protein therapies, which could target several disease pathways linked to obesity in one medicine.
Generate will receive $30 million upfront and up to $35 million in early preclinical milestones, and is eligible for total milestone payments of nearly $1.2 billion, the companies said on Tuesday. Generate's shares were up about 5% in extended trading.
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Generate, a Flagship Pioneering-backed biotechnology company that went public earlier this year, uses AI-driven technology to develop protein-based medicines. Under the agreement, Generate will lead research through candidate selection, while Zealand will handle clinical development, regulatory submissions and worldwide commercialization.
The collaboration will focus on multispecific protein therapies, medicines designed to act on more than one biological target at a time. Zealand said those treatments could target several disease pathways linked to obesity within a single medicine, an approach drugmakers are increasingly exploring as they seek more effective treatments.
Earlier this month, Zealand reported positive mid-stage trial results showing the treatment helped overweight and obese patients with type 2 diabetes lose up to 9.2% of their body weight.
Reporting by Sahil Pandey in Bengaluru; Editing by Diti Pujara and Shilpi Majumdar