Generate Biomedicines Inc. (Nasdaq: GENB) and Zealand Pharma A/S (Nasdaq: ZEAL) announced a collaboration and license agreement to develop multispecific protein therapeutics for obesity and other metabolic diseases using Generate's generative AI platform.

Under the terms of the agreement, Generate will lead research through lead-candidate selection using its proprietary AI platform, while Zealand Pharma will take responsibility for clinical development, regulatory submissions, and worldwide commercialization.

Generate will receive $30 million upfront and up to $35 million in early preclinical milestones for two initial programs. The company is also eligible for total milestones of nearly $1.2 billion, including potential development, regulatory, and commercial milestones, plus tiered royalties on worldwide net sales of any commercialized products. The agreement includes an option to add a third program.

Utpal Singh, chief scientific officer at Zealand Pharma, said the collaboration "expands our toolbox to include proteins, complementing our existing small-molecule and peptide capabilities and opening new approaches for polypharmacology for innovative therapeutics."

Mike Nally, chief executive officer of Generate, said the two companies will "first define what a great medicine for patients looks like for each of the two initial programs, and then leverage The Generate Platform to design multispecific candidates that meet or exceed that profile."

Ropes & Gray LLP acted as legal advisor to Generate, and Cooley LLP acted as legal advisor to Zealand Pharma.