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  • Kailera plans an IPO for its obesity drugs & Lilly signs a $2.75 billion AI deal Insilico Medicine

Kailera plans an IPO for its obesity drugs & Lilly signs a $2.75 billion AI deal Insilico Medicine

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Joachim Eeckhout & Eduardo Longoria
March 31, 2026

Good Morning! Royalty Pharma is increasingly doing what traditional biotech investors and lenders can’t: writing very large checks against future drug sales.

What happened: Royalty Pharma will provide $500 million over two years to co-fund the development of JNJ-4804, Johnson & Johnson’s bispecific antibody targeting IL-23 and TNF. The asset is in phase 2 for ulcerative colitis, psoriatic arthritis, and Crohn’s disease.

Why it matters: The deal is part of a broader biopharma financing trend called royalty financing. These structures let drugmakers fund expensive clinical programs without issuing equity or taking on conventional debt, while giving investors exposure to future commercial upside (royalties on drug sales). As pipelines get pricier and capital stays selective, royalty financing is moving closer to the mainstream, especially around late-stage assets.

Context: Royalty Pharma recently struck a similar $500 million autoimmune-focused pact with Teva.

Bottom line: In a tough funding environment, capital is becoming more creative to find its way to biopharma.

— Joachim E.

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SNAPSHOT

Kailera, after raising $1 billion, is heading for an IPO to support its obesity drug development

Weight loss

Kailera Therapeutics has filed to go public as it seeks more funding to advance a four-drug obesity pipeline led by ribupatide, an injectable GLP-1/GIP candidate already in global phase 3 trials.

Why it matters: Obesity drug development is one of biotech’s hottest and most expensive arenas. Kailera’s IPO plans signal that investors may still back large biotech offerings in 2026 despite broader market volatility.

Backstory: Kailera launched in 2024 with ex-China rights to four GLP-1 assets from Jiangsu Hengrui Pharmaceuticals. The company quickly became one of biotech’s biggest fundraisers, pulling in a $400 million series A and a $600 million series B, tied for the second-largest raise of 2025.

Big picture: The filing underscores both the promise and pressure of the obesity market. Breakout demand has attracted huge capital (Kailera ended 2025 with $652.7 million in cash, but also an accumulated deficit of $368.7 million), but success increasingly depends on proving differentiation against established players like Eli Lilly and Novo Nordisk.

Zoom in: Kailera lead asset, KAI-9531, or ribupatide, showed nearly 18% mean weight loss at 48 weeks in a late-stage China trial. Kailera says the drug was designed for a better profile than Lilly’s Zepbound, but it has not yet run a head-to-head trial against an approved obesity medicine. The company is also developing an oral ribupatide that showed up to 12.1% mean weight loss over 26 weeks in China, plus oral GLP-1 candidate KAI-7535 and early-stage tri-agonist KAI-4729.

What’s next: Kailera still has not disclosed how many shares it will sell or at what price. Investors will be watching for IPO terms, upcoming clinical readouts, and evidence that its drugs can stand out in a crowded field.

SNIPPETS

What’s happening in biotech today?

💻 In silico alliance: Eli Lilly has entered a drug discovery and development partnership with AI biotech Insilico Medicine worth up to $2.75 billion, expanding a collaboration that began in 2023. Lilly will use Insilico’s Pharma.AI platform to develop oral therapies across multiple disease areas, retaining exclusive global rights to resulting products, while Insilico supports R&D efforts. The deal includes $115 million upfront and up to $2.63 billion in milestone payments plus royalties. It reflects Lilly’s broader strategy of leveraging AI to accelerate pipeline growth, alongside numerous recent AI deals and acquisitions, fueled by strong revenues from its diabetes and obesity drugs.

👁️ TED progress: Viridian Therapeutics reported positive phase 3 results for its anti-IGF-1R antibody elegrobart in thyroid eye disease (TED), meeting its primary endpoint with a 54% proptosis responder rate versus 18% for placebo, alongside improvements in eye bulging and double vision. Despite these results and advantages, such as subcutaneous dosing compared to Amgen’s intravenous Tepezza, investor concerns emerged over its competitive positioning, as efficacy appeared weaker in cross-trial comparisons and below expectations. This uncertainty led to a sharp drop in Viridian’s share price, though some analysts viewed the data as acceptable. The company plans further trials and aims to seek FDA approval next year.

🏆 Lupus win: Biogen reported positive mid-stage results for its lupus drug litifilimab, which reduced disease activity in cutaneous lupus erythematosus (CLE) and met the primary endpoint in the Phase 2/3 AMETHYST trial, with 14.7% of treated patients achieving clear or almost clear skin versus 2.9% on placebo. The drug also showed rapid and sustained improvements across multiple measures, reinforcing earlier trial data and supporting its potential as a first targeted therapy for CLE in decades. Analysts view the results as a key step in derisking Biogen’s immunology pipeline, with Phase 3 data expected next year and additional trials underway in systemic lupus erythematosus.

🤷 Under pressure: Kardigan reported mixed Phase 2 results for its hypertension drug tonlamarsen, which met one co-primary endpoint by significantly reducing angiotensinogen (AGT) levels (by 67% after five doses versus 23% with a single dose), but failed to show differences in systolic blood pressure between dosing groups. The company attributed this to an unexpectedly sustained blood pressure reduction in the single-dose arm, resulting in a “split” outcome. Despite this, tonlamarsen demonstrated clinically meaningful blood pressure effects and was well tolerated, supporting advancement into a Phase 2b trial focused on high-risk patients, particularly those with severe hypertension who may benefit most.

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