Lilly tames Fauna to go on the prowl for obesity targets in $494M deal

Last month, Eli Lilly executives said that when it comes to expanding its obesity pipeline, the Zepbound-maker is in “all-of-the-above mode.” Judging by its partnership with animal genomics-focused Fauna Bio, the Big Pharma really meant it.

The collaboration will see Fauna apply its Convergence artificial intelligence platform to “support preclinical drug discovery efforts in obesity,” with the two companies identifying “multiple” drug targets. In return, Fauna will receive an undisclosed upfront payment—including an equity investment—with the potential for up to $494 million in milestone payments as well as royalties.

“We are very excited to enter into this collaboration with Lilly, which showcases the power of our Convergence AI platform to rapidly identify novel targets for complex disease areas of high unmet need," Fauna’s CEO Ashley Zehnder said in the release. "Lilly is a leader in obesity treatment, and our approach enables and accelerates discovery across different disease areas and modalities for our partners, who bring deep expertise in drug development."

Ruth Gimeno, Ph.D., group vice president, diabetes, obesity and cardiometabolic research at Lilly, added:

"Fauna Bio brings a unique approach to the discovery of novel targets for obesity," Ruth Gimeno, Ph.D., Lilly's group vice president for diabetes, obesity and cardiometabolic research, said in the release. "We look forward to working with the Fauna Bio team to realize the value of their platform and discover more effective treatments for patients with obesity."

Fauna’s Convergence platform assesses genomic analyses from hundreds of species of mammals, including 65 that hibernate. The company’s biobank includes 22 tissue types from a hibernating species of ground squirrel alone, as well as samples from other small mammals like tenrecs and spiny mice, with the aim of using “hibernation biology” to identify the best genes to target for various diseases.

It may not sound like the most obvious avenue for Lilly to explore when it has just got its obesity medicine Zepbound to market—with orforglipron also now in phase 3 trials—but the Big Pharma has clearly seen enough to pique its interest. Recent comments from executives also suggest the company is willing to be open minded.

On a third-quarter earnings call Nov. 2, Lilly’s Chief Scientific and Medical Officer Dan Skovronsky, M.D., Ph.D., urged investors not to pit one obesity program against the other in Lilly’s pipeline. “We see ourselves as a leader in the space and have a unique opportunity,” he said on the call. “And our goal is to exploit every single idea until we get data that says we shouldn’t.”