Novartis acquires Excellergy for USD2B to develop next-generation allergy treatments

DENMARK—Novartis has acquired Excellergy, a promising biotech startup, for up to USD2 billion in upfront and milestone payments.

The deal positions the Swiss pharmaceutical giant to strengthen its dominance in the allergy treatment market with a breakthrough anti-immunoglobulin E (IgE) therapy.

The Palo Alto-based biotech emerged just five months ago after securing USD70 million in funding, yet the company’s innovative approach to treating allergies caught Novartis’s attention immediately.

Excellergy’s lead candidate, Exl-111, is currently advancing through phase 3 trials and represents a potential game-changer in how doctors approach allergic diseases at their source.

Building on proven territory

Novartis already commands a significant presence in the IgE space through Xolair, its established blockbuster that generated USD1.7 billion in sales during 2025.

Xolair works by binding to IgE in the bloodstream to prevent allergic reactions, and doctors widely prescribe it for severe allergic asthma, chronic spontaneous urticaria, nasal polyps, and food allergies.

The acquisition signals Novartis’s confidence that Exl-111 can outperform this proven therapy by taking an entirely different approach.

A different mechanism

Rather than simply blocking IgE in circulation, Exl-111 targets allergic responses at their origin by disarming effector cells directly.

The drug belongs to a novel class called effector cell response inhibitors (ECRIs), technology developed through collaborations between Stanford University and the University of Bern.

These trifunctional molecules work by removing IgE antibodies already bound to receptors on mast cells and basophils—without triggering activation that causes allergic symptoms.

Fiona Marshall, President of Biomedical Research at Novartis, emphasized that the acquisition “strengthens our allergy portfolio by adding a differentiated next-generation program.”

She noted that Exl-111 demonstrates potential for faster and more complete suppression of IgE signaling compared to conventional therapies, potentially offering patients earlier symptom relief and superior disease control.

Promising early data

Preclinical studies in monkeys revealed that the compound removes over 99 percent of receptor-bound IgE from basophils, suggesting it achieves what researchers call “active dissociation of cell-bound IgE.”

Phase 1 testing began last month, building momentum toward potential applications across multiple allergic conditions, including food allergies, chronic urticaria, and asthma.

Novartis envisions broader clinical applications for Exl-111 beyond Xolair’s current reach, including more convenient dosing schedules and treatment options for patients who don’t respond adequately to existing therapies.

Market dynamics

The timing matters strategically for Novartis. Xolair’s patents have already expired in the United States, where Roche currently markets the drug.

Roche has flagged that those biosimilar versions of omalizumab—Xolair’s generic name—could appear in the American market during the second half of 2026, potentially eroding sales.

The Excellergy acquisition gives Novartis a competitive pathway to maintain and expand its position in the valuable allergy treatment market before biosimilars gain significant traction.