Zealand taps Generate’s AI discovery engine in $1.2B obesity deal
Zealand Pharma will pay Generate Biomedicines $30 million (€27 million) upfront to discover protein drugs for obesity and other metabolic diseases, broadening its pipeline beyond peptides and small molecules.
Why it matters: The deal adds another source of potential candidates as recent results from Zealand’s major partnered drugs raise questions about their competitiveness. It continues a diversification strategy already underway before those readouts.
Zoom in: The Generate agreement covers two initial programs, with an option for a third. Generate could receive up to $35 million (€31 million) in early preclinical milestones and nearly $1.2 billion (€1.1 billion) in total milestones, plus tiered royalties. Generate will lead research through candidate selection. Zealand will handle subsequent clinical development, regulatory submissions and worldwide commercialization.
How it works: Generate combines generative AI with laboratory testing to design and refine proteins. The partners want multispecific therapeutics, which can act on multiple biological targets, opening additional ways to address metabolic disease.
Backstory: Zealand took another step beyond peptides in December 2025, paying China’s OTR Therapeutics $30 million upfront to discover oral small-molecule obesity drugs. The Generate deal extends that effort to broaden its drug discovery capabilities.
Yes, but: Zealand is not having a great time lately. Two of its pharma-partnered candidates met their primary endpoints, but investors were disappointed:
- Roche-partnered petrelintide produced up to 9.2% weight loss in a Phase 2 diabetes trial, but its modest improvement in blood sugar control raised questions about its potential as a standalone treatment.
- Boehringer Ingelheim-partnered survodutide delivered up to 13.1% weight loss in Phase 3, but gastrointestinal side effects caused 18% of treated participants to discontinue.
- Zealand’s stock price has lost almost 50% of its value since the beginning of the year.
On Generate’s side: The partnership follows its $400 million IPO in February, described at the time as the largest biotech listing since 2024. The deal with Zealand adds an explicit metabolic disease collaboration alongside existing agreements with Amgen and Novartis.
What to watch: Neither company disclosed the new programs’ targets or clinical timelines. The deal expands Zealand’s discovery options, but offers no immediate answer to the questions facing its more advanced drugs.
