Merck KGaA Expands in AI-Driven R&D With Two Drug Discovery Deals

Merck KGaA Expands in AI-Driven R&D With Two Drug Discovery Deals
Merck KGaA Expands in AI-Driven R&D With Two Drug Discovery Deals


Merck KGaA is bolstering its drug discovery efforts by turning to two artificial intelligence companies, BenevolentAI and Exscientia.

Details are scant, but Merck KGaA said the multi-year agreements call for both AI companies to develop small molecule drugs in the areas of oncology, neurology, and immunology. To start, the Darmstadt, Germany-based drugmaker said it has selected three potential first-in-class and best-in-class targets for each alliance, though it is not disclosing those targets. Merck KGaA may select molecules for further preclinical and clinical development. In addition to upfront payments, the AI companies are eligible to receive additional payments tied to milestones as well as royalties from sales of any approved products.

“The partnerships with industry-leading AI technology firms BenevolentAI and Exscientia will complement our internal research capabilities and expertise, aligning with our broader strategy to enhance R&D productivity and the output of our pipeline in a sustainable manner,” Danny Bar-Zohar, global head of research & development and chief medical officer for the healthcare business sector of Merck KGaA, said in a prepared statement.

Exscientia provided a bit more detail about its deal. The Oxford, United Kingdom-based company received $20 million up front. It’s eligible for up to $674 million more if milestones for all three of the initial programs are met. Exscientia will also receive royalties from sales of any approved products that arise from the collaboration. The agreement allows the partners to identify additional targets in oncology and immunology or other mutually agreed disease areas.

Exscientia has developed an AI technology platform it applies to drug discovery research. That research focuses primarily on small molecules, though it has more recently added capabilities for designing biologic drugs. In addition to its internal drug research, the company has drug research collaborations with big pharma companies. An alliance with Bristol Myers Squibb is focused on oncology, autoimmunity, immunology, and inflammation. Exscientia’s collaboration with Sanofi is developing drugs in oncology and immunology. Other partners include Rallybio and the Bill & Melinda Gates Foundation.

BenevolentAI said its upfront payment from Merck KGaA is in the low double-digit millions. The London-based company said it is also eligible for up to $594 million in milestone payments, plus royalties from sales of commercialized products.

The Merck KGaA deal could help BenevolentAI turn around its prospects. In April, the company reported mid-stage results showing that its atopic dermatitis drug candidate did not meet efficacy goals of reducing itch and inflammation. The following month, BenevolentAI announced a business restructuring that reduced spending and cut its headcount. The company also stopped work on some programs, including the atopic dermatitis drug.

However, BenevolentAI, which describes its approach as using machine learning to generate new insights into the underlying cause of disease, is seeing progress in its AstraZeneca alliance. That collaboration has yielded two targets for chronic kidney disease and three in idiopathic pulmonary fibrosis.

Photo: Andrzej Wojcicki, Getty Images



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