Eli Lilly has expanded its partnership and licensing agreement with California-based biotech, Gate Bioscience, to develop molecular gate therapies targeting difficult-to-drug proteins.
As per the terms of this extended, multi-year deal, Lilly will hand over an undisclosed upfront payment and potential preclinical, clinical and commercial milestones totalling up to $870m. The Indiana-based pharma will also financially support Gate’s drug discovery efforts, while committing to paying out tiered royalties on potential global sales, in exchange for the exclusive global development and commercial license to any drugs created through this partnership.
While Gate is assuming responsibility for discovery efforts in this partnership, Lilly will take the helm on the later-stage preclinical, clinical and commercial development of any drugs that stem from their collaboration.
While Lilly and Gate’s expanded deal will primarily focus on a singular new target for now, the Indiana-based pharma also holds the rights to add a second target to the roster later down the line – potentially entitling Gate to another payout.
At the core of Gate’s therapeutic approach is the molecular gate concept, where oral small molecules are used to indirectly cause the degradation of a target protein by blocking it from passing through Sec61 channels. These secretory proteins, which are found in the membrane of the protein-producing portion of the cell, are intimately involved in the transport and insertion of newly made proteins. According to Gate, there are around 4,000 molecular gate targets that could hold potential to treat neurological, cardiometabolic and immunological conditions.
Lilly expands its pipeline horizons amid tirzepatide’s commercial triumph
Though both companies were light on the specific details around the disease areas they will be going after, Gate’s co-founder and CEO, Jordi Mata-Fink, noted that the expansion broadens the collaboration’s focus to a new therapeutic area, suggesting Lilly’s confidence in the modality. This aligns with Lilly’s recent approach to dealmaking, with the company having inked a plethora of high-profile agreements across several therapeutic areas – including neurology, infectious disease, ophthalmology, metabolic disease and oncology.
In 2026, Lilly has proven itself to be a prolific pharma dealmaker, with the company having outlaid just shy of $32bn thus far this year on M&A alone, according to GlobalData’s Pharmaceutical Intelligence Center.
While its multi-billion-dollar dealmaking spree seen in the first half of the year appears to have slowed down, Lilly’s expanded agreement with Gate highlights its ongoing interest in bolstering its early-stage pipeline.
Lilly was able to go forth with all these deals due to the ever-growing commercial success of its cardiometabolic franchise, which includes best-selling medication, tirzepatide, marketed as Zepbound for obesity in the US and Mounjaro elsewhere.
In Q2 alone, Mounjaro sales spiked 91% to hit $9.9bn, while Zepbound pulled in $4.9bn – accounting for around 64% of the pharma giant’s revenue in that quarter.
