Relation unveils atopic diseases agreement with Novartis — $55 million up front and up to $1.7 billion in milestone-based payments; DCVC, NVIDIA NVentures, and Magnetic Ventures co-lead $26M fundraise

There’s important news this week from Relation, one of the stars of DCVC’s growing TechBio portfolio. The company announced a major collab­o­ra­tion agreement with pharma giant Novartis to study targets for atopic diseases, those involving an exaggerated immune response to otherwise harmless substances in the environment. At the same time, Relation announced it had won $26 million in additional investment from DCVC, NVIDIA NVentures, and Magnetic Ventures. See Bloomberg coverage here. 

Atopic diseases affect hundreds of millions of people around the world. As Relation brings to bear its unique lab-in-the-loop methodology — which combines single-cell omics, AI modeling of gene and protein networks, and large-scale data generation from human tissue — the partnership has the potential to ​“transform the standard of care” for these diseases, predicts CEO David Roblin.

Under the agreement, Novartis will provide upfront payments, equity investments, and R&D funding totaling $55 million. As the resulting drug programs hit preclinical, development, regulatory, and commercial sales goals, Relation will also be in line for milestone-based payments of up to $1.7 billion, plus tiered royalties on net product sales. The Novartis partnership follows on the heels of a landmark $108 million deal last year between Relation and GSK to discover multiple targets for fibrotic disease and osteoarthritis, each with a potential $200 million in preclinical, development, commercial, and sales milestone payments. And many more such part­ner­ships are in the works. Given that its deals to date with top global pharmas have a combined $163 million in up-front payments and multiple potential billions of dollars in milestones and royalties, Relation has distin­guished itself as the world’s leading TechBio company.

DCVC encourages its TechBio portfolio companies to pursue this type of dealmaking for three big reasons. Early on, they’re an opportunity to prove the underlying technology concept while the company is still in the seed or Series A stage, before its internal programs have been proven in clinical trials. Later, industry part­ner­ships help fund those clinical trials, which are too expensive for early-stage venture-capital and private-equity backers to bear alone. Addi­tion­ally, a portion of the upfront and research payments can be put toward advancing the company’s technology platform, including its frontier AI models, atlases of biological data, and labs. Partners strongly support this use of their investments, because they simul­ta­ne­ously spur progress toward under­standing their own indications and targets.

This is a formula that’s succeeding at other DCVC-backed drug discovery companies. One is Recursion Phar­ma­ceu­ti­cals, which has part­ner­ships with Roche, Bayer, Merck KGaA, and Sanofi to create novel therapies for cancer and a range of other diseases. Then there’s Abcellera, which has been collab­o­rating with Lilly since 2020 on antibody programs to treat COVID-19 and many other diseases; Noetik, which is using its virtual cell model to help its partner Agenus predict which patients will respond to its immune-oncology treatment; and Kanvas Biosciences, which plans to leverage its ability to image and char­ac­terize gut-microbiome inter­ac­tions and develop powerful microbiome ther­a­peu­tics in collab­o­ra­tion with funders of public health research. In each case, part­ner­ships are helping the companies demonstrate the power of their platforms and taking some of the financial sting out of clinical work.

And these collab­o­ra­tions aren’t always with big phar­ma­ceu­tical companies. The concurrent $26 million investment from DCVC, NVentures, and Magnetic Ventures — coming on top of a $35 million seed-funding round co-led by DCVC and NVentures in 2024 — is exciting in part because it’s a validation of the company’s approach from the venture arm of the world’s biggest chipmaker.

We’ve always been convinced that Relation’s unique combination of computation, exper­i­men­ta­tion, and patient data will reduce failure rates in drug development and transform the way we treat common, devastating diseases. Now some of the world’s largest phar­ma­ceu­tical companies, who are the customers of TechBio and biotech innovation, are investing in that vision too. Watch this space for more remarkable progress from Relation.