Novartis Bets $1.8B on AI-Powered 'Undruggable' Target Platform

SANTA CRUZ, CA – February 18, 2026 – In a significant validation for artificial intelligence in drug discovery, biotech innovator Unnatural Products, Inc. (UNP) today announced a major research and licensing agreement with pharmaceutical giant Novartis. The deal, potentially worth up to $1.8 billion, will leverage UNP’s pioneering platform to develop macrocyclic peptide therapeutics against previously "undruggable" targets, with an initial focus on cardiovascular disease.

Under the terms of the agreement, the Santa Cruz-based company will receive up to $100 million in upfront payments and pre-Investigational New Drug (IND) milestones. Novartis will take the lead on all subsequent clinical development, manufacturing, and global commercialization of any drugs that emerge from the collaboration. In addition to development, regulatory, and commercial milestone payments that could reach $1.7 billion, UNP is also eligible for tiered royalties on net sales, ranging from the mid-single to low double-digits.

Unlocking Biology with AI and Macrocycles

The collaboration centers on a powerful but historically challenging class of molecules known as macrocyclic peptides. These ring-shaped compounds occupy a unique therapeutic space, combining the high selectivity and potency of large-molecule biologics with the oral delivery potential and drug-like properties of traditional small molecules.

This combination makes them uniquely suited to tackle disease-causing proteins that have long been considered "undruggable." Many of these targets, such as those involved in protein-protein interactions (PPIs), lack the well-defined pockets that small-molecule drugs typically bind to, rendering them inaccessible. Macrocycles, with their larger and more complex structures, can effectively bind to these flatter surfaces, opening up a vast new landscape for therapeutic intervention.

Unnatural Products has developed an integrated discovery engine designed to overcome the complexities that have historically hindered macrocycle development. The platform synergizes AI-guided molecular design with massively parallel chemical synthesis and direct-to-biology screening. This allows the company to rapidly design, create, and test vast libraries of novel macrocycles, optimizing them for potency, selectivity, and properties like cell permeability—a critical hurdle for reaching intracellular targets.

"This collaboration validates the strength of our program and highlights the ability of UNP’s platform to deliver differentiated macrocyclic therapeutics for high-value biological targets for chronic diseases with high unmet need," said Cameron Pye, Ph.D., CEO and Co-Founder of Unnatural Products, in the company's announcement.

A Strategic Move in Cardiovascular Innovation

For Novartis, the partnership represents a strategic investment in next-generation technology to bolster its formidable cardiovascular drug pipeline. Cardiovascular disease remains the leading cause of death globally, and despite a market valued at hundreds of billions of dollars, significant unmet needs persist for patients with complex conditions.

By gaining access to UNP's platform, Novartis is positioning itself at the forefront of a new wave of drug discovery aimed at the root causes of disease that have so far eluded intervention. The deal aligns with the pharma giant’s broader strategy of pursuing external innovation to tackle difficult targets, exemplified by other multi-billion dollar collaborations in areas like targeted protein degradation.

The financial commitment—a substantial sum for a preclinical program—signals strong confidence in the potential of both macrocycles and UNP's AI-driven approach.

"Advances in macrocyclic chemistry are opening entirely new avenues in drug discovery, allowing us to engage targets at a dose and with a pharmacological versatility not possible with many other approaches,” noted Muneto Mogi, Global Head of Global Discovery Chemistry for Biomedical Research at Novartis. "We believe this collaboration positions both organizations to accelerate the development of new therapies with strong scientific and clinical potential."

A Pattern of High-Profile Validation

While the Novartis deal is a landmark achievement for Unnatural Products, it is the latest in a string of high-value partnerships that have validated its technology. The company, which has raised $38 million in venture funding, has systematically proven the power of its platform to major industry players across different therapeutic areas.

Last year, UNP announced a multi-target collaboration with Argenx SE, valued at up to $1.5 billion, to develop oral macrocyclic drugs for immune disorders. It also has active partnerships with Merck & Co. Inc. to develop candidates against a cancer target and with Bridgebio Pharma Inc. for rare diseases and cancer. This consistent attraction of top-tier pharmaceutical partners underscores the perceived strength and versatility of its discovery engine.

Founded by academic pioneers from the University of California Santa Cruz, the company has translated foundational research on nature's macrocycles into a powerful engine for creating entirely synthetic therapeutic molecules.

The Competitive Race to Drug the 'Undruggable'

The pursuit of previously inaccessible drug targets has become one of the most dynamic and competitive frontiers in biotechnology. The success of drugs like UCB's Zilucoplan and the promising late-stage data from Merck's oral macrocyclic peptide MK-0616 for high cholesterol have galvanized the field, demonstrating the real-world therapeutic and commercial potential of this molecular class.

UNP operates in a landscape populated by other innovators, including Japan's Chugai Pharmaceutical, which has its own advanced macrocycle platform. Beyond macrocycles, a host of other technologies are also vying to solve the "undruggable" puzzle. These include targeted protein degraders, which use the cell's own machinery to eliminate disease-causing proteins, and a myriad of AI-first companies using computational power to design novel small molecules.

In this crowded and well-funded arena, UNP's focus on integrating AI-driven design with high-throughput synthesis and biological screening for macrocycles provides a distinct competitive edge. The series of major partnerships suggests that pharmaceutical leaders see this specialized approach as a highly promising path toward creating breakthrough medicines for patients who currently have few or no options.