Novartis is making the largest single-modality bet in pharmaceutical history on molecular glues. The company signed its second collaboration with Orionis Biosciences for up to $1.4 billion ($40 million upfront) to discover molecular glue drugs using Orionis’s Allo-Glue platform and AI-driven discovery engine. Combined with two Monte Rosa Therapeutics deals (up to $5.7 billion combined), Novartis has now committed more than $7.1 billion in potential milestone value to molecular glue technology alone across four deals with two partners. The commitment is striking because no molecular glue has been approved as a standalone therapy. The appeal: molecular glues are small molecules that redirect the cell’s own protein degradation machinery to physically eliminate disease-causing proteins from the cell. Unlike traditional inhibitors that block a protein’s function, molecular glues destroy the target entirely. This makes historically “undruggable” proteins—those lacking the binding pockets that conventional drugs require—accessible for the first time. Separately, survodutide achieved 16.6% weight loss in Phase 3, which BMO called “underwhelming”, but its fat loss composition was described as “impressive”, suggesting the drug may preferentially reduce fat while preserving lean mass. SonoThera raised $125 million for non-viral gene therapy. And EFPIA warned the EU’s Biotech Act patent incentive is too narrow to shift investment.
Top Story: Novartis Goes All In on Molecular Glues with Fourth Deal
What Happened: Novartis signed a multi-year collaboration with Orionis Biosciences on June 10 to discover and design molecular glue drugs for challenging therapeutic targets across multiple disease areas. Orionis receives $40 million upfront and is eligible for up to $1.4 billion in research, development, and commercial milestone payments, plus tiered royalties on net sales.
What Molecular Glues Are and Why They Matter
Molecular glues represent a fundamentally different approach to drug design. Traditional small-molecule drugs work by binding to a disease-causing protein and blocking its function—like putting a key in a lock to prevent anyone else from using it. The protein remains in the cell, intact but inactive.
Molecular glues take a different approach. They bring a disease-causing protein into physical contact with the cell’s own protein recycling machinery (the ubiquitin-proteasome system), which tags the target protein for destruction. The cell then degrades the protein entirely. The target does not just get blocked—it gets eliminated.
This distinction matters because many disease-causing proteins lack the traditional binding pockets that conventional drugs require. These proteins have been called “undruggable” for decades because drug developers had no chemical surface to grip onto. Molecular glues bypass this problem entirely: they do not need to bind the target protein’s active site. They only need to bring the target protein close enough to a ligase enzyme for the degradation machinery to engage. This opens an entire universe of therapeutic targets that no existing drug class can reach.
Novartis’s head of discovery sciences John Tallarico said Orionis’s technology “offers an opportunity to rapidly uncover and design molecular glue mechanisms, enabling us to expand the horizon of targetable biology for future therapies.”
Four Deals, Two Partners, $7.1B+
The Orionis deal is Novartis’s fourth molecular glue collaboration:
Orionis (March 2020): First collaboration. Terms undisclosed. Established the relationship.
Monte Rosa Therapeutics (October 2024): $150 million upfront, up to $2.1 billion in milestones. Focused on an early-stage immune-mediated disease asset.
Monte Rosa Therapeutics (September 2025): Second deal expanding the partnership. Up to $5.7 billion combined across both Monte Rosa agreements, covering an undisclosed number of molecular glue candidates.
Orionis (June 2026): $40 million upfront, up to $1.4 billion in milestones. Uses AI-driven discovery to identify and optimize molecular glues across multiple disease areas.
Total committed milestone value across the four deals exceeds $7.1 billion. No other pharmaceutical company has invested this heavily in molecular glue technology. The concentration of capital in a single modality is without precedent in Novartis’s history and arguably in the industry’s history.
Orionis CEO Niko Kley said: “Having such a partner continue to engage deeply with us is a strong validation of the value of our molecular glue platform.” The fact that Novartis returned to Orionis six years after the first collaboration—and simultaneously deepened its Monte Rosa partnership—signals that the internal data generated from the earlier deals were compelling enough to justify dramatically expanded investment.
The Risk and the Thesis
The risk is straightforward: no molecular glue has been approved as a standalone therapy. BMS’s mezigdomide, a related cereblon modulator in late-stage development for myeloma, is the closest precedent—but it is technically a different class. Novartis is committing more than $7 billion in milestones to a modality that has not yet proven it can produce an approved drug.
The thesis is equally straightforward: if molecular glues can systematically access undruggable targets, they open a therapeutic space that no existing modality can reach. The AI-driven discovery engines that both Orionis and Monte Rosa have built are designed to turn what was previously a serendipitous process (molecular glue discovery has historically relied on lucky findings rather than rational design) into a systematic, scalable platform. If the platforms work as designed, Novartis will have a decade-long pipeline of novel drug candidates against targets that no competitor can address with conventional small molecules, biologics, or gene therapy.
Our Pro brief analyzes the molecular glue mechanism in depth, assesses why Novartis is betting $7B+ on a modality without an approved standalone drug, and evaluates the competitive positioning against BMS’s CELMoD platform. [Details below.]
Survodutide: Underwhelming Weight Loss but Impressive Fat Composition
What Happened: BioSpace reported that Boehringer Ingelheim and Zealand Pharma’s survodutide achieved 16.6% overall weight loss in its Phase 3 obesity trial. BMO Capital Markets called the weight loss “underwhelming” but described the fat loss composition as “impressive.”
Why Body Composition May Matter More Than Total Weight
The 16.6% total weight loss puts survodutide below the current competitive benchmarks: Wegovy at approximately 15-17%, Zepbound at approximately 22%, and retatrutide at 28.3%. On total weight loss alone, survodutide does not differentiate meaningfully from the established GLP-1 therapies.
But the fat composition data tell a different story. BMO’s description of the fat loss as “impressive” suggests that survodutide may preferentially reduce fat while preserving lean mass (muscle and bone). This is clinically significant because one of the most important concerns about GLP-1-driven weight loss is that patients lose both fat and muscle. In older patients and those at risk for sarcopenia (age-related muscle loss), losing substantial lean mass alongside fat can worsen functional status, increase fall risk, and reduce quality of life even as the number on the scale goes down.
If survodutide genuinely preserves lean mass while reducing fat, it occupies a differentiated position in the obesity market. Rather than competing head-to-head with Wegovy and Zepbound on total pounds lost, it would position as a body composition optimizer—a drug that produces healthier weight loss rather than maximum weight loss. This is the same thesis behind GSK/SiranBio’s ALK7 inhibitor ($1 billion deal, May 6), which aims to reduce fat while preserving lean tissue through a non-GLP-1 mechanism.
The emerging segmentation of the obesity market along a body composition axis adds another layer to the competitive dynamics. Lilly’s three-tier portfolio (Foundayo, Zepbound, retatrutide) dominates the total-weight-loss axis. If body composition becomes a clinically validated differentiator—with data showing that lean-mass-preserving approaches produce better long-term functional outcomes—drugs like survodutide and ALK7 inhibitors could carve out a complementary niche that the pure GLP-1 agonists cannot easily replicate.
SonoThera Raises $125M for Ultrasound-Mediated Gene Therapy
What Happened: SonoThera raised $125 million in a Series B to advance safer gene therapies delivered through ultrasound-mediated technology rather than viral vectors.
Why This Matters: The gene therapy field’s 2026 safety signals have elevated the urgency around non-viral delivery. The REGENXBIO Duchenne adverse events and the AAV-linked brain tumor case both involved viral vectors—the delivery vehicles that carry therapeutic genetic material into patient cells. While AAV (adeno-associated virus) remains the most established gene therapy delivery method, its theoretical risks (immunogenicity, insertional oncogenesis, liver toxicity at high doses) have prompted the industry to invest in alternatives.
SonoThera’s approach uses focused ultrasound to temporarily increase cell membrane permeability, allowing genetic material to enter cells without a viral carrier. The technology could enable tissue-targeted gene therapy delivery with reduced systemic exposure and without the immune responses that viral vectors can provoke.
The non-viral gene therapy investment landscape is expanding rapidly. Lilly acquired Engage Biologics (non-viral DNA delivery) and partnered with Profluent ($2.25 billion, AI-designed recombinases). SonoThera adds a third distinct approach—ultrasound-mediated delivery. Each technology addresses the viral vector safety concern through a different mechanism. The diversity of approaches reflects both the size of the unmet need and the uncertainty about which non-viral method will ultimately prove most effective for different tissue targets and therapeutic applications.
EFPIA Urges EU to Widen Biotech Act Patent Incentive
What Happened: EFPIA urged EU lawmakers on June 15 to broaden a proposed patent-style incentive in the Biotech Act, warning that the current plan is too narrow to materially shift pharmaceutical investment decisions.
Why This Matters: The push comes at a moment when Europe’s ability to retain biopharma investment is under visible strain. Lilly and Boehringer each pulled more than $1 billion from Germany in response to a healthcare reform initiative. The EU Critical Medicines Act (agreed May 22) attempts to secure pharmaceutical supply chains but does not address the pricing dynamics that drive investment decisions. And the U.S. Section 232 tariff framework, combined with MFN pricing deals and onshoring incentives, is creating a gravitational pull toward U.S.-based manufacturing and R&D investment.
EFPIA’s argument is that if the EU wants to compete with the United States for pharmaceutical R&D investment, its patent incentives must offer comparable value. A narrow patent incentive that applies only to a limited set of technologies or company sizes will not change the fundamental calculus that pharmaceutical companies make when deciding where to build facilities, run clinical trials, and file for regulatory approval. The incentive must be broad enough and valuable enough to offset the pricing compression that European healthcare systems impose.
The numbers tell the story. The United States accounts for approximately 60-65% of global pharmaceutical revenue despite having less than 5% of the world’s population. This revenue concentration is what draws pharmaceutical investment to the U.S. market—companies go where the returns are highest. European markets, with government-negotiated pricing that is typically 40-60% below U.S. levels, generate less revenue per patient and therefore attract less investment per capita. The Section 232 tariff framework and MFN pricing are compressing U.S. margins, but even after compression, the U.S. market remains significantly more profitable than European markets. For the EU to compete, its patent incentives need to close the gap—or at least narrow it enough to make European investment attractive on a risk-adjusted basis.
The tension between European governments wanting lower drug prices and also wanting to attract pharmaceutical investment has been a recurring theme throughout 2026. The EFPIA statement makes it explicit: the two objectives are structurally in conflict, and the current EU proposal does not adequately resolve the tension.
Strategic Themes
1. Novartis’s $7B+ Molecular Glue Commitment Is the Largest Modality Bet in Pharma
Four deals, two partners, more than $7.1 billion in milestones, zero approved standalone drugs. Novartis is betting that molecular glues will prove as transformative as monoclonal antibodies were in the 1990s or ADCs are proving to be now—a platform technology that opens entire categories of previously inaccessible therapeutic targets. The risk is commensurate with the ambition: if the modality does not produce approved drugs within the next five to seven years, $7 billion in milestones will have been committed to an unproven thesis. But if even a fraction of the molecular glue candidates reach the market, Novartis will have a competitive moat in a therapeutic space no other company can access.
2. The Obesity Market Is Developing a Body Composition Axis That Complements Total Weight Loss
Survodutide’s “impressive” fat composition alongside “underwhelming” total weight loss is not a failure—it is a differentiation opportunity. The obesity market is large enough to support multiple competitive axes. Total weight loss favors retatrutide, Zepbound, and Wegovy. Body composition optimization could favor survodutide, ALK7 inhibitors, and potentially other mechanisms that preferentially reduce fat while preserving lean mass. For patients where functional outcomes matter as much as scale outcomes—particularly older adults, post-surgical patients, and those at sarcopenia risk—composition-optimizing drugs fill a genuine clinical need.
3. Non-Viral Gene Therapy Investment Is Accelerating as AAV Safety Concerns Mount
SonoThera ($125 million), Engage Biologics (Lilly acquisition), Profluent ($2.25 billion Lilly collaboration)—three distinct non-viral delivery approaches all advancing simultaneously. The gene therapy field is hedging against the possibility that viral vector safety concerns limit the modality’s addressable market. If non-viral delivery can match viral vector efficacy with a better safety profile, the gene therapy market expands dramatically to indications where the current risk-benefit calculus does not favor AAV.
4. Europe’s Patent Incentive Debate Will Determine Whether Pharma Investment Continues to Flow Westward
EFPIA’s warning is not abstract. Lilly and Boehringer already pulled $2 billion-plus from Germany. Pfizer is weighing whether to invest or follow its peers in withdrawing. The EU’s Biotech Act patent incentive is one of the few policy levers that could shift the calculus back toward European investment. If the incentive is too narrow to matter, pharmaceutical capital will continue flowing toward the United States, where pricing dynamics and onshoring incentives remain more favorable.
Frequently Asked Questions
What are molecular glues?
Small molecules that redirect the cell’s own protein degradation machinery to physically eliminate disease-causing proteins. Unlike traditional drugs that block a protein’s function, molecular glues destroy the target entirely. This makes “undruggable” proteins accessible for the first time.
How much has Novartis committed?
More than $7.1 billion in potential milestones across four deals with two partners (Orionis Biosciences and Monte Rosa Therapeutics). No other pharma company has invested this heavily in the modality.
What is the survodutide result?
16.6% total weight loss in Phase 3 (BMO called it “underwhelming”). But the fat loss composition was described as “impressive,” suggesting the drug may preferentially reduce fat while preserving lean mass. This positions survodutide as a body composition optimizer rather than a maximum weight-loss drug.
What is SonoThera?
A gene therapy company that raised $125 million (Series B) to develop ultrasound-mediated gene therapy delivery without viral vectors. The approach could sidestep the AAV safety concerns that have emerged this year.
What is the EFPIA patent incentive issue?
EFPIA warned that the EU Biotech Act’s proposed patent incentive is too narrow to shift pharmaceutical investment decisions. The concern is that without competitive patent incentives, pharmaceutical R&D investment will continue flowing toward the United States.
When is BIO International?
Next week, June 22 to 25 in San Diego. The industry’s largest partnering event.
BioMed Nexus Pro — What Institutional Subscribers Are Reading Today
Molecular Glues. We analyze why Novartis is betting $7B+ on a modality without an approved standalone drug, how the AI-driven discovery platforms at Orionis and Monte Rosa turn serendipitous discovery into systematic science, and what the competitive landscape looks like against BMS’s CELMoD approach.
Fat vs. Weight. We compile the obesity drug landscape along the emerging body composition axis, assess how survodutide’s fat-selective profile positions against GLP-1 therapies and ALK7 inhibitors, and model whether body composition data can support a differentiated commercial position.
Non-Viral Gene Therapy. We map SonoThera, Engage, and Profluent as three distinct approaches to replacing AAV, assess which tissue targets each technology is best suited for, and evaluate whether non-viral delivery can match viral vector efficacy.
Plus: EFPIA Biotech Act analysis, European investment flow tracker, Revolution filing watch, and the updated catalyst calendar through H2 2026.
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