Zealand Pharma is adding AI-designed proteins to its obesity pipeline. The Copenhagen-based drug developer said on October 13 that it had signed a collaboration and license agreement with Generate Biomedicines, a US biotech that uses generative AI to engineer protein therapeutics, to create multispecific medicines for obesity and other metabolic diseases.
The financial terms follow a familiar biotech pattern in which most of the headline value is contingent. For two initial programs, Generate receives $30 million upfront and can earn as much as $35 million more as early preclinical goals are met. Counting later development, regulatory and commercial milestones, the total could approach $1.2 billion, and Generate would also collect tiered royalties on worldwide net sales of any product that reaches the market. Zealand holds an option to add a third program.
The division of labour is clear. Generate will run research with what it calls The Generate Platform, which pairs generative AI models with high-throughput laboratory validation, until lead candidates are chosen. Zealand then takes over clinical development, regulatory filings and global commercialisation. In the announcement, Generate chief executive Mike Nally said the two teams would first define a target profile for each medicine and then use the platform to design candidates meant to meet or beat it.
Multispecific proteins are designed to engage several biological targets simultaneously. Reuters reported that Zealand sees them as a way to hit several obesity-related disease pathways with a single medicine, an approach a growing number of drugmakers are exploring as they look for options beyond the GLP-1 drugs from Novo Nordisk and Eli Lilly that now dominate the market.
For Zealand the deal also widens its technical base. The company has built its pipeline mainly on peptides; its chief scientific officer, Utpal Singh, said the agreement adds proteins to its existing small-molecule and peptide work and opens new routes to polypharmacology. Zealand says more than ten drug candidates invented in its labs have entered clinical trials, two of which have reached the market. It is also co-developing the obesity candidate petrelintide with Roche under an agreement worth up to $5.3 billion that was signed last year, according to Reuters.
Generate, backed by Flagship Pioneering and listed on Nasdaq earlier this year, gains a partner with deep metabolic expertise and a route into one of the most crowded and lucrative areas of drug development. Its shares rose about 5% in extended trading after the announcement, Reuters reported.
The agreement says nothing yet about whether AI-designed proteins will work better in patients. No candidate has been named, no development timeline was disclosed, and the bulk of the $1.2 billion depends on milestones that many programs never reach. What the deal does show is that established obesity specialists are now willing to pay for generative design capacity rather than build it in-house, a sign of how AI platforms are being folded into conventional pharmaceutical licensing.