TL;DR:
- Merck KGaA commits to AI-driven drug discovery with partnerships worth over $30 million upfront.
- BenevolentAI and Exscientia join forces with Merck in identical three-target deals.
- Merck’s global head of R&D, Danny Bar-Zohar, envisions groundbreaking medical breakthroughs through AI.
- The partnerships focus on cancer, neurology, neuroinflammation, and immunology targets.
- Exscientia receives a $20 million upfront payment with potential milestones of up to $674 million.
- BenevolentAI secures a low-double-digit million-dollar upfront payment, part of a package valued at up to $594 million.
- Promising first-in-class and best-in-class targets identified for collaboration.
- Biotech firms Exscientia and BenevolentAI benefit from the partnerships, revitalizing their market positions.
Main AI News:
Merck KGaA, a pioneer in healthcare and life sciences, is doubling down on its commitment to harness the power of artificial intelligence (AI) in drug discovery. In a groundbreaking move, the company has forged identical, three-target partnerships with two industry-leading AI innovators, BenevolentAI and Exscientia, propelling the pharmaceutical giant to the forefront of this transformative field. These strategic collaborations represent a substantial investment, exceeding a staggering $30 million upfront with the potential to reach an astounding $1 billion in milestones.
The visionary Danny Bar-Zohar, Merck’s global head of R&D for healthcare, believes in the convergence of science, data, and AI as the catalyst for “previously unimaginable medical breakthroughs.” This audacious vision is shared by both Merck and its AI partners. However, as AI-driven drug discovery is still in its infancy, the question of which company possesses the capabilities to turn this vision into reality remains unanswered.
Merck’s strategic decision to partner with not one but two formidable AI leaders significantly enhances its odds of success. The terms of these deals mirror each other closely: Merck, headquartered in Germany, will provide a low double-digit million-dollar upfront payment, coupled with an unwavering commitment to invest more than $500 million in potential milestones. Together, they will focus on three critical therapeutic areas: cancer, neurology and neuroinflammation, and immunology.
Exscientia, renowned for its pioneering work in AI-enabled drug discovery, stands to receive a substantial $20 million upfront payment from Merck. In a potential windfall, Exscientia could amass up to $674 million in milestones, with a remarkable $113 million allocated to the discovery phase. On the other hand, BenevolentAI’s terms are equally lucrative, albeit slightly more discreet. The London-based company has secured a low-double-digit million-dollar upfront payment, forming part of a comprehensive package valued at up to $594 million.
Merck has meticulously identified three promising first-in-class and best-in-class targets for collaborative efforts with each partner. Both BenevolentAI and Exscientia will deploy their cutting-edge AI platforms to craft small molecule candidates tailored to these targets. These candidates will undergo rigorous evaluation, progressing from preclinical development to clinical trials, underscoring the commitment to advancing innovative therapies.
These strategic alliances extend a lifeline to biotech companies that have faced a turbulent journey on public markets. Exscientia, based in Oxford, U.K., while maintaining multitarget collaborations with industry giants like Bristol Myers Squibb and Sanofi, has experienced a roller-coaster ride since going public two years ago, with an 81% decline in its stock value. However, the news of the Merck partnership sent Exscientia’s stock soaring by 20% to $6.03 in premarket trading, signaling renewed investor confidence.
Meanwhile, London-based BenevolentAI faced even steeper challenges, including a devastating setback in its midphase eczema trial earlier this year, which precipitated a precipitous 90% drop in its share price and the necessity to downsize its workforce by 180 employees. In response, the company has refocused on generating cash flow and established a dedicated tech division to commercialize AI products. Moreover, it has appointed a chief revenue officer to lead its revival efforts. BenevolentAI also maintains a strategic partnership with AstraZeneca, further underscoring its commitment to innovation and growth in the healthcare sector.
Conclusion:
Merck KGaA’s strategic alliances with AI innovators BenevolentAI and Exscientia mark a significant step toward revolutionizing drug discovery. These partnerships not only boost Merck’s position in the AI-driven pharmaceutical landscape but also provide much-needed support to biotech companies, potentially reshaping the market’s dynamics by unlocking groundbreaking therapies.
