The investment continues a Novo dealmaking spree to cement its leadership status in the cardiometabolic space, with partnerships with Photys Therapeutics, Ascendis Pharma and two Flagship-backed start-ups.
Novo Nordisk on Wednesday announced that it will expand a 2023 contract with Boston biotech Valo Health to develop novel treatments for obesity, type 2 diabetes and other cardiometabolic conditions.
The expanded deal’s initial consideration involves a total of $190 million in an upfront payment, equity investment and milestones. The partners will be able to work collaboratively on up to 20 drug programs for which milestone payments could reach around $4.6 billion, in addition to R&D funding and potential royalties.
Novo and Valo first entered into their partnership in September 2023. At the time, the obesity leader paid $60 million upfront and pledged up to $2.7 billion for the opportunity to collaborate on 11 cardiometabolic programs. At the center of the collaboration is Valo’s AI-enabled preclinical capabilities, which allow the biotech to identify and validate druggable targets, as well as design and screen potentially therapeutic molecules against these targets.
Valo says its preclinical edge comes from its proprietary computational platform Opal, which leverages AI models built using high-quality human data. What the biotech calls its “integrated approach” to drug discovery and development generates and uses data at every stage of the process—from disease and target discovery through regulatory approval—producing a “self-reinforcing, active learning system” that improves its performance with each experiment, the company says on its website.
Valo claims its human-centric data library is “the largest and densest in the world,” and that models developed using these data can help Valo and its partners predict disease progression “and how a drug will perform before it even touches a person.”
For Novo, Valo’s approach appears to be working well. Pharma CSO Marcus Schindler said in a statement on Wednesday that the company is “very pleased with the progress” it has seen under the Valo partnership, leading to its decision to expand the agreement. Since launching in 2023, the collaboration has already identified several novel targets that could potentially serve as bases for “differentiated cardiometabolic drug” candidates, according to Wednesday’s news release.
“We are excited to expand the scope to put a stronger focus on obesity and type 2 diabetes,” Schindler added.
The expanded Valo partnership is Novo’s latest move in its quest to further entrench itself as a leader in the cardiometabolic space. Last month, the pharma put $186 million down to partner with Photys Therapeutics and potentially unlock a new drug class—the bifunctional small molecules called PHICS, which leverage specific phosphorylation kinases.
A month earlier, in November 2024, Novo linked up with fellow Danish company Ascendis Pharma to develop novel GLP-1 therapies with a lower dosing frequency, pledging $285 million in the deal. In January 2024, Novo signed back-to-back agreements with Flagship biotechs Omega Therapeutics and Cellarity, putting a total of $1 billion on the line. The companies will work on innovative treatment approaches to obesity and metabolic dysfunction-associated steatohepatitis.
