Novo Nordisk Expands AI Drug Research with Valo Health to Tackle Obesity and Diabetes

Novo Nordisk, a prominent pharmaceutical company, has announced an expansion of its collaboration with artificial intelligence (AI) startup Valo Health, focusing on developing innovative treatments for cardiometabolic disorders. Initially centered on cardiovascular disease, the partnership will now also target conditions such as obesity and type 2 diabetes. The expansion comes with a substantial financial commitment of $190 million, which includes an upfront payment, an equity investment, and a near-term milestone payment.

The original collaboration between Novo Nordisk and Valo Health was established in 2023, covering up to 11 programs aimed at addressing cardiovascular diseases. The initial deal provided Valo, based in Lexington, Massachusetts, with $60 million upfront and promised up to $2.7 billion in milestone payments. With the expanded collaboration, the partnership now encompasses 20 programs, with potential milestone payments climbing to $4.6 billion.

Novo Nordisk has made significant strides in the metabolic disease arena with its GLP-1 agonist semaglutide, marketed as Ozempic for type 2 diabetes and Wegovy for obesity. The company is also investing in the research and development of next-generation drugs that promise improved tolerability and potentially greater weight loss. Among its promising candidates is CagriSema, a combination of semaglutide with cagrilintide, which recently showed statistically significant results in a Phase 3 trial. Despite this success, Novo Nordisk's shares fell due to the weight loss results being underwhelming compared to expectations.

In its quest to diversify and strengthen its pipeline of metabolic medicines, Novo Nordisk has turned to business development, entering deals that bring novel drug candidates in oral forms. Although specific targets of the Novo Nordisk-Valo agreement remain undisclosed, the collaboration has reportedly led to the identification of "several novel targets" that could result in differentiated cardiometabolic drugs. Multiple small molecule programs are currently in preclinical development.

Valo Health, founded in 2020 and backed by Flagship Pioneering, employs AI-driven simulations through its Opal Computational Platform to predict the safety and efficacy of potential drugs. CEO Brian Alexander notes that Valo’s approach is human-centric, using real-world data to identify novel drug targets and leveraging human models to swiftly discover and develop small molecules to address those targets. Although Opal is not specific to any indication, Valo has made considerable investments in cardiometabolic diseases as a primary focus area.

While Valo is not currently revealing specific details about its pipeline, it has disclosed that OPL-0401, a diabetic retinopathy candidate, failed to meet primary or secondary endpoints and will be suspended. This in-licensed molecule was not developed using the Opal platform. Moving forward, Valo intends to concentrate its efforts on leveraging Opal to develop new drugs, including those covered under the expanded agreement with Novo Nordisk.

Valo's collaboration with Novo Nordisk has demonstrated the potential of its platform’s technological capabilities and its human-centric approach in developing new medicines. Alexander emphasized that the extension of the partnership to include obesity and type 2 diabetes validates the effectiveness and promise of their joint efforts.