Bristol-Myers pays up to $1.2bn to enter artificial-intelligence pact

Bristol-Myers Squibb has agreed to pay up to $1.2bn to enter a drug discovery collaboration with artificial intelligence start-up Exscientia as the Big Pharma company bets on the power of the technology to turbocharge drug development.

The agreement comes as the biotech industry deploys AI to speed up the process of screening molecules that can then be tested as drugs to tackle illnesses ranging from cancer to heart disease.

Andrew Hopkins, chief executive of Oxford-based Exscientia, said the deal was an “endorsement” of the company’s technology, which “isn’t a promise, but is here today and delivering”.

Discovering a drug and bringing it to market is a process that can take more than 10 years and costs on average $2.6bn per medicine, according to the Tufts Center for the Study of Drug Development in Boston.

Last year Exscientia became the first company to take a molecule designed by AI into human clinical trials. Three molecules developed by its platform are being tested on humans, with its experimental Alzheimer’s treatment entering phase 1 trials last week.

However, all of its drugs are still in the very earliest stages of human testing and it will take years to determine whether they work or not, while medical regulators have not yet approved a drug that was designed using AI.

“The BMS collaboration is further validation that the technology really is focusing now not just on discovering molecules but really focusing on delivering new medicines to clinic,” Hopkins said.

Pharma investors have poured billions of dollars into AI and machine learning in recent years, hoping that the technologies will become the next frontier of drug innovation.

The money funnelled into AI-focused pharma groups increased 30 per cent in 2020 compared to 2019, according to biotech analysis company Deep Pharma Intelligence.

Under the terms of the deal, Bristol-Myers will make an upfront payment of up to $50m to Exscientia and a further payment of up to $125m over the near to medium term, depending on whether the company hits several milestones, including whether several drugs progress to the clinical stage.

Exscientia, which raised $525m in series D funding from SoftBank’s Vision Fund 2 in April, said that hitting additional clinical, regulatory and commercial milestones would take the value of the deal beyond $1.2bn after four years.

Bristol-Myers will have “exclusive licence” to drugs developed under the partnership, the company said, with Exscientia earning royalties.

Exscientia has entered agreements with a number of companies, including French drugmaker Sanofi and German pharma group Bayer. Its Alzheimer’s drug was developed with Japanese company Sumitomo Dainippon Pharma.

“We want to reduce the time it takes from an idea that’s emerging in academia to becoming a new medicine for patients,” said Hopkins.

Bristol-Myers and Exscientia will begin by working on three pills, or “small molecules”, to tackle cancer and immunological disorder, but Hopkins said “the collaboration is open to any therapeutic area of BMS’ interest”.

“By the end of this decade, we think there’s a strong argument that all small molecule drugs should be being designed using artificial intelligence,” Hopkins added.