Merck KGgA collaborates with Exscientia plc in deal worth up to $674M

By Liza Laws

- Last updated on GMT

© Getty Images
© Getty Images

Related tags Collaboration Research Small molecule drugs Oncology neuroinflammation Immunology

Exscientia plc will receive an upfront cash payment of $20 million from Merck KGaA, Darmstadt, Germany, as the companies collaborate plus potential payments of up to $674 million in aggregate.

Merck KGaA is focused on discovering small molecule drug candidates across oncology, neuroinflammation and immunology and will use Exscientia’s artificial intelligence (AI) driven precision drug design and discovery capabilities.

Three potential first-in-class or best-in-class targets have been identified as the initial focus of the partnership. The collaboration allows Merck KGaA, and Exscientia to identify additional targets in oncology and immunology or other mutually agreed disease areas.

Should Exscientia identify additional targets for the collaboration, the company would be responsible for target validation in addition to drug design and eligible for additional discovery milestones.

“We’re pleased that Merck KGaA, Darmstadt, Germany chose our team of experts for this AI-led drug discovery collaboration,” said Andrew Hopkins, founder and chief executive officer of Exscientia.

“We look forward to complementing their outstanding scientific acumen with our integrated technology platform and ability to generate novel data in order to address some of the hardest drug design challenges in cancer and immunology.”

Under the terms of the agreement, as well as the upfront cash payment of $20 million from Merck KGaA, Exscientia will be eligible for discovery, development, regulatory and sales-based milestone payments of up to $674 million in aggregate if all milestones for all three initial programmes are achieved.

If Merck KGaA, Darmstadt, Germany commercializes a therapeutic from one of the initial targets of the collaboration, Exscientia will receive tiered royalties on product sales ranging from mid-single-digits to low-double-digits.

The upfront cash payment of $20 million is expected to be reflected in second half 2023 results for Exscientia as cash inflows from collaborations and recognised as revenue over the duration of the agreement.

Exscientia is known for​ developing the first-ever functional precision oncology platform to guide treatment selection and improve patient outcomes in a prospective interventional clinical study.

The platform is also used to progress AI-designed small molecules into the clinical setting. The company says its internal pipeline is focused on leveraging its precision medicine platform in oncology, while its partnered pipeline broadens our approach to other therapeutic areas.

Merck explores data science and AI approaches to speed up the discovery and delivery of breakthrough medicines​. It says integrating AI across research and development (R&D) processes from identifying targets to clinical trials and product lifecycle management, is aimed at transforming drug discovery and development that will bring medicines to patients faster.

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