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The basics:

• Novartis‘ Excellergy deal valued at up to $2 billion, expected to close in H1 2026
• Next-generation anti-IgE drug Exl-111 joins allergy lineup
• Therapy designed for faster, deeper suppression of IgE signaling
• Acquisition part of Novartis’ strategy to offset patent expirations on top drugs

Novartis plans to shell out up to $2 billion to acquire California-based biotech Excellergy.

As part of the deal, the Swiss pharmaceutical giant will add early-stage drug candidate Exl-111 to its existing allergy portfolio. The agreement includes both upfront and milestone payments, Novartis said in a March 27 press release.

The transaction is expected to close in the first half of 2026, according to the company. Novartis has its U.S. headquarters in East Hanover.

Novartis’ allergy lineup already includes top-selling Xolair. After the drug’s patent expired in some EU markets, it has led to increased competition, Reuters pointed out.

Like Xolair, EXL-111 targets Immunoglobulin E (IgE) antibodies. Designed to act longer and bind more tightly, EXL-111 helps remove IgE from its receptor, according to Novartis. Early studies suggest it may suppress allergic signaling faster and more effectively than existing drugs. However, larger human trials are still needed.

Building on experience

Novartis President of Biomedical Research Fiona Marshall commented, “Excellergy adds a differentiated next-generation anti-IgE program that builds on biology Novartis knows well, supported by preclinical evidence and early clinical pharmacokinetic data.”

“Exl-111 is designed to go beyond conventional anti-IgE therapy, with the potential to deliver faster and deeper suppression of IgE signaling as well as improved symptom control. This proposed acquisition strengthens our allergy portfolio and reflects our strategy of advancing innovative bold science to bring meaningful additional benefits to patients,” Marshall went on.

Red Tree Venture Capital seeded Excellergy in 2021. The firm officially launched last year. It focuses on developing new allergy treatments.

This proposed acquisition strengthens our allergy portfolio and reflects our strategy of advancing innovative bold science to bring meaningful additional benefits to patients.
– Fiona Marshall, Novartis president of biomedical research

Excellergy CEO Todd Zavodnick said the acquisition will bring together his company’s novel therapeutics with the development expertise of Novartis.

“Together, we will be ideally positioned to realize the full potential of Exl-111 and the broader ECRI [engineered cytokine receptor inhibitors] pipeline for the millions of patients living with severe, debilitating allergic diseases,” he said.

At a loss

The deal is the latest attempt by Novartis to offset patent expirations of heart medicine Entresto and plaque psoriasis biologic Cosentyx. Novartis warned earlier this year that profits would decline in early 2026 as some of its top drugs lose their protections.

It comes just a week after Novartis announced it plans to acquire Synnovation subsidiary Pikavation Therapeutics. It will pay up to $3 billion to secure the rights to an experimental breast cancer drug.

In February, the company also scooped up Avidity Biosciences. That $12 billion deal added three late-stage programs to Novartis’ neuromuscular pipeline.

CNBC noted that many of the best-selling drugs in the world face a loss of exclusivity in what the industry refers to as “the patent cliff.” By 2030, several companies risk losing hundreds of billions in revenue as branded drugs will face generic competition.

Rahway-based Merck just announced an agreement to buy Terns Pharmaceuticals for up to $6.7 billion. It marks the third multibillion-dollar acquisition for Merck over the past year, as the company looks to boost its pipeline before the 2028 patent expiration of its blockbuster cancer drug Keytruda.