Unnatural Products Secures $1.5B Strategic Collaboration with argenx to Develop Oral Macrocyclic Peptide Therapies Targeting 'Undruggable' Immune Pathways

In July, the U.S.-based new drug platform company Unnatural Products (hereinafter referred to as UNP) announced a strategic partnership with Belgian immunotherapy giant argenx to jointly develop orally available drugs based on macrocyclic peptides for targeting complex protein-protein interaction sites.

According to the agreement, argenx will pay UNP up to 1.5 billion US dollars in total consideration, including an undisclosed upfront payment and R&D and commercialization milestone payments. UNP will use its AI-driven platform to design macrocyclic peptide molecules targeting proteins selected by argenx and advance them to the pre-IND research stage; argenx will be responsible for the clinical development and commercialization of the candidate molecules. This collaboration will explore the application potential of macrocyclic peptides on complex targets.Combined with argenx's expertise in immune modulation and protein degradation mechanisms (such as molecular glues)`, providing the possibility for discovering a new generation of small molecule or oral treatment solutions.`

Argenx said,Valuing UNP's capabilities in the "undruggable" target field, especially its automated drug discovery platform inspired by natural products, which can identify macrocyclic peptide candidate molecules with oral bioavailability and cell permeability at an early stage.

Macrocyclic peptides are an emerging class of molecules with molecular weights typically ranging between 500 and 2000 Da, sitting between small-molecule drugs and large-molecule biologics in size, and can be regarded as an intermediate modality between small molecules and proteins—middle molecules. They possess some advantages of small molecules, such as oral bioavailability and ease of synthesis, while also providing a binding surface similar to antibodies in terms of size, affinity, and specificity. Therefore, macrocyclic peptides are considered "a bridge connecting the blind spots of drug research," capable of targeting protein interactions that are difficult for traditional small-molecule drugs to bind to, and offering oral formulations for targets usually treated by biologics.

Its cyclic backbone structure not only enhances the coverage ability of the binding interface but also improves the molecule's stability, selectivity, and cell permeability. It is especially suitable for PPI (Protein-Protein Interactions) targets where "antibodies cannot cover and small molecules cannot insert."

However, macrocyclic peptides themselves are not a "universal key." Due to their complex structures, they currently face technical bottlenecks such as difficulties in synthesis, screening, and optimization, and have not yet achieved widespread industrial application.

UNP, Inc. precisely tackles this key challenge. Since its establishment in 2017, it has focused on an automated synthesis platform, high-throughput screening systems, and AI-assisted design methods.Build an End-to-End Drug Discovery Platform for the Design, Screening, and Optimization of Macrocyclic Peptides。

Through innovative approaches such as artificial intelligence (AI) and high-throughput screening, they are attempting to solve a long-standing challenge for drug developers—how to target "undruggable" protein targets.

UNP has built a platform focused on macrocyclic peptide drug discovery, with core technology centered on combining high-throughput parallel chemistry with machine learning models to achieve precise targeting and efficient optimization of complex targets, especially intracellular "undruggable" targets.

This platform can generate a large number of structurally diverse drug-like macrocyclic peptide molecules in a short period of time, and combine machine learning for drug-likeness prediction and iterative design, thereby significantly improving screening efficiency. It is especially suitable for targets in indications such as cancer and rare diseases that are difficult to address through traditional small molecules or antibody approaches.

Specifically, the core advantages are reflected in two aspects:

1. The target adaptability is strong, especially suitable for intracellular targets such as protein-protein interactions (PPIs).Such targets are typically difficult for small molecules to bind effectively due to characteristics like conformational openness and broad binding interfaces. However, the macrocyclic peptides generated by the UNP platform can provide larger and more adaptable binding interfaces, potentially increasing the "hit rate" for previously undruggable targets.

Secondly, it has outstanding capabilities in optimizing drug-like properties and possesses the potential for oral administration.The platform not only focuses on the binding ability of molecules but also systematically evaluates their drug-like properties, including oral bioavailability, cell permeability, metabolic stability, and more. The candidate products demonstrate not only excellent selectivity and cell permeability but also show potential for oral bioavailability in early animal experiments. This breakthrough could overcome the traditional limitations of peptide therapies that rely on injections, laying the foundation for the development of a new generation of macrocyclic peptide drugs that are "oral, penetrable, and targetable."

Although the specific architecture of the platform has not been disclosed, its focus on AI-driven molecular design, automated chemical synthesis, and systematic exploration of undruggable targets has been deeply integrated into the mainstream technological trends of current macrocyclic peptide drug development. Meanwhile, through the cross-disciplinary integration of AI and chemistry, it demonstrates innovative characteristics in the early drug discovery process.

As of now, UNP has disclosed very limited product information publicly.Focusing on Cancer and Rare Genetic Diseasesand other fields. These projects mostly target intracellular proteins, often involving mechanisms such as PPIs that are difficult to be effectively addressed by small molecules or antibody drugs.

As UNP builds up its macrocycle peptide drug discovery platform, its technical capabilities have begun to be tested and validated in real projects. In 2023, UNP entered into a strategic collaboration with Merck to develop macrocycle peptide candidates targeting a challenging oncology target, with a potential total deal value of up to $220 million. This marks the endorsement of UNP's platform and pipeline by a multinational corporation (MNC) at the preclinical stage.

In 2024, BridgeBio officially exercised its collaboration option to acquire multiple lead-stage macrocyclic peptide candidates, advancing the development in rare genetic disorders and oncology treatment. Subsequent research and clinical progress will be led by BridgeBio.

The partner in this collaboration, argenx, is a global biotechnology company focused on autoimmune diseases. Its core product, Vyvgart (efgartigimod), has been launched in multiple countries, with sales skyrocketing. In 2022, its sales reached $400 million, and by 2023, they had surged to $1.191 billion. In the first half of this year, the company achieved total revenues of $1.739 billion, with $949 million generated in the second quarter alone, representing a 97% increase compared to the same period last year. This demonstrates strong market penetration and growth momentum. The collaboration with UNP aims toExploring the Potential Applications of Macrocyclic Peptides in Antibody-Hard-to-Reach Targets, further enriching its pipeline of immunomodulatory drugs.

In just three years, UNP has secured strategic partnerships with three international pharmaceutical companies in the fields of oncology, immunology, and rare diseases.This indicates that its platform is moving from being "usable" to truly "being used."

Notably, UNP adopts a "core platform-based R&D collaboration" model: it takes charge of early molecular discovery itself, while subsequent clinical development is advanced by its partners. This model has gradually become a typical pathway for mid-molecule platforms in recent years, as it ensures high efficiency and low-cost operations while facilitating rapid validation of technical capabilities and commercial implementation.

At the same time, for UNP, collaborating with large multinational pharmaceutical companies also provides an opportunity to continuously optimize its platform and accumulate R&D data and experience, laying a solid foundation for exploring more technically challenging new fields in the future (such as neurological and metabolic targets).

UNP was born at the University of California, Santa Cruz (UCSC). Its two founders, Cameron Pye and Joshua Schwochert, jointly studied the structure and properties of macrocyclic peptides in Professor Scott Lokey's laboratory. Through long-term exploration, they accumulated extensive knowledge about the permeability, stability, and synthetic routes of macrocyclic peptides, which led to the conception of industrializing a platform for constructing large cyclic peptide drugs.

Figure 1: Portrait of UNP Co-founders (Left: Cameron Pye, Right: Joshua Schwochert)

Since its establishment in 2017, UNP has completed two rounds of publicly disclosed financing, with a total amount of $38 million, mainly invested by Merck Global Health Innovation Fund (Merck GHI Fund) and ARTIS Ventures, the latter having led its seed round and Series A financing.

Table 1: UNP Publicly Disclosed Financing Overview

Merck Global Health Innovation Fund (GHI) is a corporate venture fund established by Merck in 2010, focusing on investments in digital health and cutting-edge drug technologies, and laying out an innovative ecosystem beyond traditional pharmaceutical companies. Its investment in Unnatural Products (UNP) reflects its emphasis on an "AI + Chemistry" integrated drug discovery platform.

In recent years, the layout of China's innovative drug sector in the peptide and medium molecule drug directions has been gradually deepening. Compared with the past single-target drug development approach, new molecular forms represented by macrocyclic peptides are receiving more attention.

In March this year, Beijing Yuansi Shengtai (Syneron Bio) announced a strategic partnership with AstraZeneca to develop first-in-class macrocyclic peptide drugs for chronic diseases. The deal includes a $75 million upfront payment, up to $3.4 billion in R&D and commercial milestone payments, equity investment, and access to the Synova high-throughput macrocyclic peptide screening platform, supporting collaborative R&D across multiple target areas including rare diseases, autoimmune disorders, and metabolic diseases.

Inspired by UNP, how should China's innovative pharmaceutical companies achieve strategic breakthroughs in new drug discovery methods in the 21st century?

First, platform construction takes precedence over the development of a single product.UNP and Syneron Bio both started with system construction, serving multiple targets and pipelines through the development of platform technology, which has enabled the companies to possess greater reusability and flexibility.

Secondly, AI must be deeply integrated with biological experimental processes to form a self-contained closed loop.From the design, synthesis, screening to target validation of macrocyclic peptides, algorithms must form a closed loop with the experimental system to achieve efficient hits and rational optimization.

Finally, the cooperation authorization model can reduce early risks and expand research and development directions.UNP chooses to collaborate with large pharmaceutical companies, entrusting clinical development to its partners while the platform enterprise focuses on early-stage discovery and validation. This "asset-light, platform-focused" business model is particularly well-suited for domestic mid-sized molecular platform companies still exploring innovative targets.

If the construction of platforms, capital support, and the pathways for international cooperation can be further accelerated, platform-based Biotech will achieve new breakthroughs in complex indications and targets such as neurodegenerative diseases, emerging infections, and metabolic disorders, truly advancing toward the phase of "systematically unlocking the dark areas of drug discovery."