Novartis and Matchpoint Therapeutics Announce $1.06B Strategic Collaboration to Develop Oral Covalent Inhibitors for Inflammatory Diseases

On July 24, Novartis announced an exclusive strategic collaboration with preclinical biotechnology company Matchpoint Therapeutics. The two parties will leverage Matchpoint's Advanced Covalent Exploration (ACE) platform to jointly develop oral small-molecule covalent inhibitors targeting specific transcription factors for the treatment of inflammatory diseases.

According to the agreement, Matchpoint will receive a $60 million upfront payment and R&D funding. If all R&D, regulatory, and commercial milestones in the collaboration are achieved, Matchpoint is also eligible to receive up to $1 billion in milestone payments (including option exercise fees). Novartis will obtain global development and commercialization rights for any molecules arising from the collaboration.

Behind the $1 Billion Deal: Novartis' Patent Crisis in Autoimmunity and Strategy for Next-Gen Blockbuster Products

Matchpoint Therapeutics, Inc. was founded in 2021 and is headquartered in Watertown, Massachusetts, USA. The company focuses on leveraging covalent chemistry technology to develop precision small-molecule drugs to target traditionally "undruggable" targets. Matchpoint Therapeutics was co-founded by experts in covalent chemistry, proteomics, and computational science from Stanford University and Harvard Medical School. The core team includes Professor Nathanael Gray of Stanford University (an expert in medicinal chemistry) and Edward Chouchani of Harvard Medical School (an expert in mechanisms of metabolic diseases).

In 2022, Matchpoint Therapeutics secured $30 million in seed funding (led by Atlas Venture and Access Biotechnology) and $70 million in Series A financing (led by Sanofi Ventures with participation from Vertex Ventures HC), bringing the total funding to $100 million. The funds will be used to advance its ACE platform and immunology pipeline.

The core of this transaction is Matchpoint's ACE platform. The platform integrates three major technological modules: machine learning, chemical proteomics, and a covalent compound library, aiming to screen for hidden binding sites in the proteome, especially on difficult-to-drug targets.

Matchpoint's core technology is covalent chemistry. Unlike the transient binding of traditional small molecule inhibitors or antibody drugs to target proteins, covalent inhibitors form permanent (or irreversible) bonds with target proteins. In its statement, Matchpoint Therapeutics noted that the durable target engagement achieved through covalent chemistry can deliver higher potency, greater selectivity, and reduced systemic exposure—outcomes that are difficult to achieve with other approaches.

The specific target of this collaboration has only been disclosed as "a transcription factor associated with multiple inflammatory diseases." Such transcription factors are typically located in the cell nucleus, acting as key switches in signaling cascades. However, they have long been considered "undruggable" due to the lack of stable binding pockets (deep pockets). Covalent inhibitors can "lock" them by forming high-affinity and long-lasting covalent bonds, providing a new avenue for tackling such targets.

Immune and inflammatory diseases are the second largest therapeutic area after oncology, with significant market potential. Relevant data shows that the sales of autoimmune drugs such as Dupixent, Skyrizi, and Stelara all exceeded $10 billion in 2024.

However, the field also faces the challenge of the patent cliff. According to data from Founder Securities, among the drugs with global sales exceeding $5 billion in 2024, products with patents expiring or nearing expiration before 2030 account for a total sales volume close to $200 billion, of which autoimmune drugs make up about one-fifth. This indicates a huge market space awaiting new drugs to fill.

The core mechanism of immune-inflammatory diseases is the imbalance of the immune system, which mistakenly damages the body's own tissues and leads to chronic inflammation. Key signaling pathways (such as the cytokine network) often regulate multi-organ inflammation, allowing a single drug to cover multiple disease types with broad-spectrum effects.

With the deepening understanding of the core mechanisms of immune inflammation (such as immune system imbalance, key cytokine networks), as well as the validation of emerging targets like STAT6, IRAK4, TL1A, TSLP, PDE3/4, and the emergence of new technologies such as TCE multi-antibodies, the next generation of "blockbuster" drugs is in the making.

Currently, inflammatory diseases are one of the key therapeutic areas for Novartis, with several blockbuster products already on the market, including IL-17 antibodies and CFB inhibitors. The R&D pipeline also encompasses a variety of innovative therapies, such as BTK inhibitors, BAFFR antibodies, CD19 CAR-T, IL-18/IL-1β bispecific antibodies, and NLRP3 inhibitors.

Novartis' heavy investment in Matchpoint's covalent platform is closely related to the urgent challenges it faces in the autoimmune field.

In 2014, Xolair, a collaboration between Novartis and Roche, received FDA approval as a treatment for chronic urticaria. Xolair is an anti-IgE drug that specifically targets and blocks IgE. By reducing free IgE, downregulating high-affinity IgE receptors, and limiting mast cell degranulation, it minimizes the release of mediators during the allergic inflammation cascade.

As one of Novartis' two core autoimmune products, Xolair has been approved in multiple countries for various indications including moderate to severe persistent allergic asthma (SAA), chronic spontaneous urticaria (CSU), chronic idiopathic urticaria (CIU), and nasal polyps (CRSwNP). In China, Xolair was approved in August 2017 as the first targeted drug for asthma treatment. According to Novartis’ financial report, Xolair generated $1.463 billion in revenue in 2023, representing a 7% year-on-year increase. However, the compound patent for Xolair has already expired, and its formulation patent is set to expire in November 2025.

Another key autoimmune product of Novartis, the IL-17A monoclonal antibody Cosentyx (covering broad markets such as psoriasis and rheumatic diseases), will also see its critical patents expire in 2025/2026. Additionally, among the top ten best-selling drugs in the autoimmune field, except for Cosentyx, most were launched before 2010 and their patents have already expired.

Facing the dilemma of patent expiration ahead and the "pursuers" from various major MNCs behind, Novartis is encountering increasingly fierce competition in the field of immune diseases: Sanofi's IL-4Rα monoclonal antibody Dupixent and Eli Lilly's IL-17A monoclonal antibody Taltz are both strong competitors.

Looking at Novartis' strategic reserves in the autoimmune field, the most promising candidate currently in the pipeline is the BTK inhibitor Remibrutinib. For the indication of chronic spontaneous urticaria, it is in the registration phase; for chronic inducible urticaria, it is in Phase III clinical trials. Cosentyx is also expanding its indications for GCA (giant cell arteritis) and PMR (polymyalgia rheumatica), currently in Phase III clinical trials. Up next is lanalumab, which is in Phase II clinical trials, while most other transactions are still in the early stages. This means that although Remibrutinib is the most promising product to take the lead, it is still in the registration or Phase III stage and will not be able to shoulder significant responsibilities in the short term.

Against this backdrop, the key strategy for Novartis to ensure future growth is to rapidly introduce external innovative technologies to strengthen its product pipeline through strategic acquisitions and BD collaborations. This partnership with Matchpoint Therapeutics not only targets the promising field of covalent small molecules but also represents a continuation of Novartis' recent series of BD initiatives.

Just last month, Novartis entered into a four-year strategic collaboration with computational biology company ProFound Therapeutics, paying $25 million upfront and up to $750 million in milestone payments to explore novel cardiovascular therapies in the field of proteomics.

Going back to April this year, Novartis made an even bigger move by acquiring Regulus Therapeutics for an $800 million upfront payment to gain access to the company’s miRNA pipeline, particularly the candidate drug farabursen for polycystic kidney disease.

These acquisitions are highly aligned with Novartis' established plans. Vas Narasimhan, CEO of Novartis, has stated that the company’s strategy is to "primarily seek incremental acquisitions that can drive growth by 2030 and beyond."

This potential collaboration with Matchpoint, worth over 1 billion US dollars, is a concrete manifestation of this strategy in the autoimmune field.

By betting on a covalent technology platform with the potential to break through "undruggable" targets, Novartis aims to strengthen its immunology pipeline, address the looming patent cliff, and seize the high ground in the next generation of billion-dollar autoimmune drugs.