Novartis Invests $65M in Programmable Biology Breakthrough; Collaboration Uncertain

The deep integration of experimental verification is set to propel programmable biology into a new era. A recent agreement has been forged between Novartis and Generate to expedite the development of innovative therapies. This collaboration will leverage the Generate Platform's advanced technology alongside Novartis' extensive expertise in target biology, biologics development, and clinical development. The exact number of targets and treatment areas involved in this collaboration remains undisclosed.

Novartis has made an initial investment of $65 million in Generate, with $15 million allocated to increase its equity in the company. Furthermore, Generate stands to receive over $1 billion in milestone payments as the partnership progresses, along with tiered royalty benefits.

Previously, Generate entered into a collaboration agreement with Amgen in 2022, valued up to $1.9 billion, to co-develop five clinically targeted protein therapies. In 2023, Amgen expanded this collaboration to include a sixth target for research and development.

Generate has established a comprehensive research and development pipeline that spans various disease areas, including immunology, oncology, and infectious diseases. Two of its drug candidates, GB-0669 and GB-0895, have advanced to clinical trials. GB-0669 is a monoclonal antibody targeting the spike protein of COVID-19, while GB-0895 is designed as an anti-TSLP monoclonal antibody for severe asthma patients. The company’s pipeline also includes bi-specific drugs for non-small cell lung cancer, CAR-T therapies for solid tumors, and undisclosed antibody-drug conjugate (ADC) therapies. Generate plans to advance four to five new pipelines into clinical trials within the next two years.

In 2023, Novartis divested its Sandoz business, fully transitioning into an innovative drug development company. Its strategic focus now centers on four core therapeutic areas: cardio-nephro-metabolism, immunology, neuroscience, and oncology. Novartis is not only strengthening its traditional chemical and biological drug platforms but is also expanding its New Modality platform. This platform spans several cutting-edge areas, including radioligand therapy (RLT), gene and cell therapy, and xRNA therapy.

Novartis has actively pursued its new strategy through numerous deals. From 2019 to September 2023, Novartis' business development transactions totaled over $60 billion, with transactions in the current year alone surpassing $20 billion. The company has made significant inroads into the tumor, immunization, and kidney disease fields. Novartis places high expectations on emerging platforms, particularly radioligand therapy, xRNA therapy, and artificial intelligence platforms.

In the cardiovascular-nephro-metabolic domain, Novartis has seen notable success with xRNA therapy. Leqvio, an xRNA therapy, has been approved and launched in over 70 countries since its FDA approval in 2020, with expected peak annual sales of up to $3 billion. Building on Leqvio's success, Novartis has invested nearly $6 billion in xRNA therapeutic partnerships and initiatives over the past two years to solidify its leading position in this field.

In oncology, while Novartis has not made significant breakthroughs in PD-1 therapy and ADC, it has achieved substantial success in radioligand therapy. Novartis has successfully launched two RLT products, Lutathera and Pluvicto, which have seen rapid adoption. Recognizing the unique advantages of RLT, including significant efficacy and low side effects, Novartis has committed to this field through mergers, acquisitions, and cooperative transactions totaling nearly $7 billion over the past two years.

New technologies are emerging as a significant driver of Novartis' performance growth. According to Novartis' Q2 2024 financial results, sales of Pluvicto reached $345 million in the quarter, a 44% increase, while Leqvio sales reached $182 million, a 134% increase. Although the New Modality market is still in its early stages, it holds substantial potential and faces relatively little competition. Novartis' continuous investment in these frontier areas is gradually establishing its leading industry position, expected to create a solid market monopoly and drive significant revenue growth in the future.