At the heart of the deal is Relation’s Lab-in-the-Loop platform, which uses AI models to improve understanding of diseases and guide clinical development programs.
Months after securing an approval for the kinase inhibitor Rhapsido in chronic hives, Novartis is investing potentially north of $1.7 billion to further deepen its dermatology expertise by partnering with London-based Relation.
Details in the Tuesday press announcement were sparse, with the companies announcing only that they will leverage the British biotech’s AI-driven engine to design and develop novel targets for atopic diseases. The partners did not specify what indications they intend to prioritize or how many candidates they plan on studying.
There was more information regarding the financial terms of the arrangement: Novartis has agreed to pay $55 million to cover an upfront commitment, equity investment and additional research funding to Relation. In addition, the British company will be entitled to up to $1.7 billion in preclinical, development, regulatory and sales milestones. Novartis will also be on the hook for tiered royalties on net product sales.
In return for the investment, Novartis will leverage Relation’s proprietary Lab-in-the-Loop platform, which combines artificial intelligence models with multi-omic findings obtained from patients. This approach, according to the biotech’s website, helps “understand the basis of clinical phenotypes.”
Under Tuesday’s agreement, Relation will use its Lab-in-the-Loop technology to conduct observational studies and generate “functional cell atlases” using patients’ own tissues, in turn “capturing the disease state in humans with unprecedented resolution.” Novartis will use these findings to inform clinical development. The pharma will have worldwide development and commercialization rights over targets identified through this approach.
Aside from Novartis, Lab-in-the-Loop has previously captured the attention of GSK, which last December signed back-to-back agreements with Relation to advance therapies for osteoarthritis and fibrotic diseases. GSK fronted $45 million in total for both deals.
For Novartis, the Relation collaboration will help strengthen its already-dominant position in the immuno-dermatology space. Aside from Rhapsido—which with its October approval became the industry’s first oral BTK inhibitor for chronic spontaneous urticaria—the company owns the anti-IL-17A antibody Cosentyx for severe plaque psoriasis as well as other non-skin conditions such as psoriatic arthritis and ankylosing spondylitis.
In the first nine months of 2025, Cosentyx sales grew 7% year-on-year to hit $4.86 billion. In July, however, the drug hit a clinical speedbump after it failed a Phase III study in giant cell arteritis.
