Obesity-focused Zealand Pharma is buying into Generate:Biomedicines’s generative AI platform to create new multispecific drug candidates.
Zealand Pharma is enlisting Generate:Biomedicines and its AI-driven drug design platform to develop treatments for weight loss and metabolic conditions in a deal that could reach up to $1.2 billion.
The agreement, announced Tuesday, includes a $30 million upfront payment from Zealand, plus up to $35 million in early preclinical milestones. Generate could collect almost $1.2 billion in total development, regulatory and commercial milestones, plus tiered royalties on sales of any alliance asset that reaches the market.
For its investment, Danish biopharma Zealand gains access to Generate’s generative AI platform to design new protein therapeutics for obesity and other metabolic diseases. Generate will be responsible for all research activities through candidate selection, while Zealand will take charge of clinical development, as well as regulatory and commercialization activities.
With one of the most mature pipelines among its peers, Generate is at the leading edge of a growing class of drugmakers using generative AI to design drugs. Founded in 2018 by Flagship Pioneering, the biotech’s approach “infers generalizable principles of biology” to design potentially therapeutic molecules targeting some of the most difficult-to-crack conditions, according to the company’s website.
Massachusetts-based Generate went public in February with $425 million—money meant to support the Phase 3 development of its anti-TSLP therapy GB-0895 for severe asthma. GB-0895, which is also in early-stage studies for chronic obstructive pulmonary disease (COPD), was designed using the company’s generative AI platform.
Phase 1 data disclosed last month showed that a single subcutaneous injection of GB-0895 led to “rapid and sustained reductions” in asthma biomarkers through six months of follow-up. The anti-TSLP antibody likewise lowered disease biomarkers in COPD. Tolerability, the study’s primary outcome, was also favorable, with treatment-emergent adverse events balanced between GB-0895 and placebo groups.
Generate’s pipeline also includes two cancer candidates: the MMAE-targeting antibody GB-4362 and the armored CAR T therapy GB-5267. Both are in early-stage development. Generate also has platform collaborations with Novartis and Amgen, through which the AI drugmaker will design novel therapies for a host of confidential programs.
For Zealand, the Generate agreement comes after an underwhelming readout last week for the long-acting amylin analog petrelintide. In the Phase 2 ZUPREME-2 study, which assessed weight loss at 28 weeks, patients on petrelintide saw up to a 9.2% mean weight loss versus 2% for placebo comparators. A total of 220 patients with obesity or overweight who also had type 2 diabetes were enrolled in the study.
While ZUPREME-2 hit its main goal, analysts at William Blair said they were “disappointed” that petrelintide did not elicit greater weight loss.
Also leaving analysts wanting was the reduction in A1c, a measure of average blood sugar levels—the drug reduced A1c by up to 0.65% versus a 0.23% increase in placebo. William Blair at the time pointed to A1c reductions seen with rival therapies such as Eli Lilly’s Zepbound and Novo’s Wegovy ranging from 1.3% to 2.1%.
Petrelintide is being developed in collaboration with Roche, which in March 2025 paid $1.65 billion upfront to license the asset and study it with the pharma’s own obesity candidate CT-388. The partners in September launched the Phase 3 ZUPREME program for petrelintide, aiming to enroll around 7,000 patients total.
Earlier this month, Zealand reported another obesity disappointment, this time for the Boehringer Ingelheim–partnered survodutide. The companies touted up to 13.1% weight loss at 76 weeks in patients taking the glucagon/GLP-1 receptor dual agonist—findings that investors found underwhelming, sending Zealand’s shares down 8% in the aftermath. Boehringer licensed survodutide from Zealand in 2011.
