AI specialist Fauna grabs $494m Lilly obesity alliance


Co-Founders Katie Grabek (CSO), Ashley Zehnder (CEO), and Linda Goodman (CTO) in the Fauna Bio main research facility in Emeryville

A US biotech that is trying to find new avenues for treating human diseases by studying the genomics of animal species, Fauna Bio, has agreed a deal with Eli Lilly focusing on obesity that could be worth around $500 million.

The Emeryville, California-based company will apply its Convergence artificial intelligence platform to support preclinical drug discovery at Lilly, aiming to deliver multiple drug targets that could result in weight-loss drugs.

Fauna looks for natural protective mechanisms in animals, and the Lilly alliance will draw on work the biotech has carried out on the genomics of the 13-lined ground squirrel, a hibernating species that the company’s chief scientific officer and co-founder Katie Grabek says is a “natural…model of extreme physiology of weight gain and weight loss.”

The squirrel doubles its weight in fat accumulation during the summer, then stops eating entirely and enters into a state of hibernation over the winter, fasting for six months and emerging in the spring lean and devoid of fat.

“While markedly obese pre-hibernation, these animals do not develop aspects of metabolic syndrome, are protected from cardiac damage and do not develop diabetes, while showing clear changes in obesity characteristics such as insulin resistance over the hibernation season,” according to Grabek.

They also not only maintain but even rebuild skeletal muscle, despite being motionless for half of the year. One issue with weight-loss therapies used in humans is that they can result in the loss of skeletal muscle along with fat, which has negative health consequences.

Lilly is a great fit for the startup, as it is a major player in metabolic diseases, with drugs like Trulicity (dulaglutide) and Mounjaro (tirzepatide) for diabetes and recently launched Zepbound (also tirzepatide) for obesity.

Under the terms of the collaboration, Fauna Bio will receive an undisclosed upfront payment, including an equity investment, and is in line for $494 million in preclinical, clinical and commercial milestone payments, as well as royalties on product sales.

Fauna Bio’s discovery biobank data includes over 22 distinct tissue types collected at 13 unique and highly precise physiological time-points from the 13-lined ground squirrel, as well as tissue samples from tenrecs and spiny mice.

In total, the company has collected thousands of transcriptomes, proteomes, and epigenomes and over 22 billion sequence reads.

21 December, 2023