Argenx has been collaborating with Unnatural Products in drug discovery for more than a year. The companies have yet to report the progress of this research, but what Argenx has seen about its partner’s platform technology so far has persuaded it to buy the startup outright for $550 million up front.
The deal announced Monday brings Argenx new capabilities to develop oral peptides, complementing the company’s expertise in engineering antibody drugs. It also give the Amsterdam-based biotech a way to potentially compete against several big pharmaceutical companies that are establishing a presence in oral peptide drugs, particularly in the immunological indications that are the focus of Argenx.
Peptides easily break down in the gut and it’s hard for them to pass through intestinal walls, so such drugs are typically administered as injections. Santa Cruz, California-based Unnatural Products, or UNP, develops macrocyclic peptides that are formed into a ring. This shape keeps the peptide’s amino acids from being exposed to digestive enzymes and facilitates passage of the molecule through intestinal walls.
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For most of the past decade, UNP has used its technology platform to develop macrocyclic peptides for biopharmaceutical industry partners. Collaborators include Novartis, BridgeBio Pharma, and Merck. Argenx’s alliance with UNP was announced in mid-2025. The companies disclosed no details about the targets, other than to describe them as historically “undruggable” disease targets. In addition to an unspecified upfront payment, Argenx made an equity investment in the startup.
Argenx’s commercial presence in immunology is through Vyvgart, an antibody fragment with FDA approvals for two rare inflammatory disorders that affect muscles and nerves. According to Argenx’s third quarter 2026 financial report, the drug achieved $4.5 billion in product sales in the first nine months of this year, a 58.1% increase compared to the same period in the prior year.
An ongoing clinical program could support expansion of this drug, available as an infusion and subcutaneous injection, to other indications. The injectable formulation, Vyvgart Hytrulo, met the main goals of a Phase 3 test in autoimmune myositis, results that are set for presentation Wednesday during the American College of Rheumatology conference. But not all of these research efforts have panned out. A month ago, Argenx discontinued development of Vyvgart Hytrulo in Sjögren’s disease following a Phase 3 failure in this common autoimmune condition that leads to dry eyes and dry mouth.
Argenx’s recent $2 billion Forte Biosciences buyout gives the company another way to expand its scope to common immunological disorders. Lead Forte program FB102 is a clinical-stage antibody in development for vitiligo and celiac disease. Similar to the UNP deal, Argenx had taken an equity stake in Forte prior to buying the company. In the UNP acquisition announcement, Argenx CEO Karen Massey said her company is “investing with discipline where it will count the most for patients.”
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UNP had raised about $83 million in its history, most recently a $45 million Series B round announced in March. At that time, the startup said it would use the capital to move closer to the clinic with internally discovered and developed macrocyclic peptides for cardiometabolic disorders as well as inflammatory and immunological indications.
The UNP acquisition comes in what has been a big year for oral peptides. In March, the FDA approved Johnson & Johnson’s Icotyde for plaque psoriasis. Additional clinical trials are underway that could support label expansion for this drug, which J&J projects could achieve $5 billion in peak sales. In July, the FDA approved Merck’s cholesterol-lowering macrocyclic peptide drug Lipfendra. Last month, Gilead Sciences agreed to pay nearly $1.3 billion up front for an early-stage PepStar Therapeutics macrocyclic peptide with potential applications in inflammatory bowel disease and more.
Leerink Partners analyst Thomas Smith, who follows Argenx, said in a research note that UNP helps Argenx expand beyond its focus on specialized antibodies. He added that the deal fits with a broader industry trend in immunology that’s moving toward oral and long-acting drugs with the potential for better efficacy and convenience compared to conventional biologic medicines.
“Overall, we view the UNP acquisition as an investment into ARGX’s drug discovery capabilities, adding further modality optionality with macrocyclic peptides that unlocks novel biology and indication expansion,” Smith said.
Argenx said it will maintain UNP’s team and California site, which it said will become its home for peptide discovery. The two companies expect to complete the transaction by the end of this year. Depending on the progress of the programs, UNP could receive up to $595 million in milestone payments.
Photo illustration: Cheng Xin, Getty Images