Sanofi agrees to partnership with A.I.-based drug discovery company…

Sanofi, the Paris-based pharmaceutical giant, has signed a research collaboration with Exscientia, which uses artificial intelligence to discover new drug candidates, that could be worth up to $5.2 billion for the Oxford, England–based company.

The deal is a major milestone for A.I.-based drug discovery methods, which have attracted billions of dollars in investment in recent years on the promise of making the search for new medicines significantly more efficient and less risky, but have only just begun to produce new medicines that are entering human clinical trials. Research firm Emersion Insights estimated that $2.1 billion was invested in A.I.-based drug discovery startups in just the first half of 2021, the latest period for which data is available, and at that pace was on track to surpass the total amount invested in any prior year.

The agreement between Sanofi and Exscientia will see the two companies work to develop 15 new drug candidates for cancer and other diseases in which the immune system may play a significant role. Sanofi will pay Exscientia $100 million in cash upfront, with Exscientia eligible to receive additional payments worth up to $5.2 billion in total if certain research and development milestones are met, the companies said in a statement.

If Sanofi goes on to commercialize one of the drugs Exscientia helps it develop, the pharmaceutical company will also pay the biotech firm royalties that the companies said would range “from high single-digits to mid-teens” percentages, and up to 21% if Exscientia chose to coinvest in the clinical trial portions of the medicine’s testing.

Under the agreement, Exscientia will be responsible for finding the drug targets and designing the molecules that will interact with them. Sanofi will then take the most promising of these candidates, perform preclinical testing and clinical trials, and then manufacture and commercialize those that are successful.

“Sanofi’s collaboration with Exscientia aims to transform how we discover and develop new small-molecule medicines for cancer and immune-mediated diseases,” Frank Nestle, Sanofi’s global head of research and chief scientific officer, said in a statement. “Application of sophisticated A.I. And machine-learning methods will not only shorten drug discovery timelines, but will also help to design higher quality and better targeted medicines for patients.”

Sanofi first began collaborating with Exscientia in 2016, and three years later Sanofi exercised an option to license a drug candidate Exscientia had discovered that could be effective in immunological and inflammatory conditions. To find that particular potential drug, Exscientia had used its A.I. Software to design almost 100 billion new molecular compounds that might act on more than 1,000 targets that its data showed were associated with metabolic disease and fibrosis. Exscientia took the most promising of these and synthesized them chemically, and then validated that they would interact with the intended targets experimentally.

Since then, Exscientia has enhanced its ability to test drug candidates through its acquisition of Vienna-based startup Allcyte, which has technology that enables a large number of cancer drugs to be tested on tumor tissue samples from real patients, allowing it to select those that show the most promise for that particular patient’s cancer. Allcyte uses A.I.-based computer vision systems to detect how well the cancer cells are responding to the treatment. Exscientia can now use similar technology to help validate its potential drugs. This should, in theory, lessen the risk that these drugs will fail in subsequent clinical trials.

The Oxford-based company went public last year on the Nasdaq, raising more than $350 million for investors and an additional $160 million through a private placement deal with SoftBank and the Bill & Melinda Gates Foundation. In addition to its deal with Sanofi, Exscientia has drug development deals with Bristol Myers Squibb, Bayer, Evotec, and Sumitomo Dainippon Pharma (DSP).

A drug that Exscientia developed for obsessive-compulsive disorder and has licensed to DSP became the first A.I.-developed drug to reach human clinical trials in 2020. The company has since had two other drugs, one for psychosis and one for Alzheimer’s disease, also reach this stage. A few other companies, including Insilico Medicine, BenevolentAI, and Schrödinger, have also had drugs developed through the use of A.I. Reach human clinical trials.