Novartis signs $1B+ biobucks deal with Generate

The AI-driven biotech company, Generate:Biomedicines, has entered into a substantial partnership with Novartis, aiming to advance protein therapeutics for various medical conditions. Announced on September 24, the agreement, which is potentially valued at over $1 billion, is described as a "multi-target collaboration." Specific disease areas have not been disclosed.

As part of the deal, Novartis will provide an upfront payment of $65 million in cash, including a $15 million equity investment in Generate. Additionally, the biotech could receive more than $1 billion in milestone payments, along with tiered royalties up to low double-digit percentages.

The collaboration focuses on Generate’s generative AI platform, which blends machine learning with high-throughput experimental validation. This innovative platform aims to pioneer a new era of programmable biology. By leveraging Novartis' expertise in target biology and clinical development, the partnership seeks to accelerate the creation of new therapeutics.

Generate CEO Mike Nally expressed enthusiasm about the partnership, highlighting the opportunity to expand the use of their generative biology platform to address more unmet medical needs. He emphasized the potential to create better medicines more rapidly by working closely with Novartis.

Founded by Flagship in 2018, Generate has a history of forming significant alliances with major pharmaceutical companies. In 2022, Amgen entered an agreement with Generate worth up to $1.9 billion to develop five initial programs, with the possibility of expanding to ten. Amgen has already exercised its option in part, and the two companies are currently working on six undisclosed programs.

Generate has also been successful in securing substantial funding. The company raised $273 million in a series C round last year and $370 million in a series B round in 2021. These funds have supported the development of their pipeline, which includes two clinical candidates: GB-0669, a monoclonal antibody (mAb) targeting the COVID-19 virus' spike protein, and GB-0895, an anti-TSLP mAb for severe asthma patients.

At the beginning of this year, Generate announced plans to advance four to five additional assets into clinical trials over the next two years. Their pipeline includes a preclinical bispecific targeting non-small cell lung cancer, developed in collaboration with the University of Texas MD Anderson Cancer Center, and an armored CAR-T for solid tumors, in partnership with the Roswell Park Comprehensive Cancer Center.

Additionally, Generate is working on a preclinical antibody-drug conjugate and a protein binder designed to act as an ADC toxin neutralizer, further showcasing their innovative approach to developing new therapeutics.

The partnership with Novartis represents a significant step for Generate, enhancing their capacity to tackle a broader range of medical challenges and reinforcing their position as a leader in the biotech industry focused on programmable biology.