Sanofi Forms Potential $5.2 Billion AI Deal With Exscientia

(Bloomberg) — Sanofi formed a deal to develop 15 experimental oncology and immunology drugs with Exscientia Plc with possible total payouts of as much as $5.2 billion, allying with a company that uses artificial intelligence to make new medicines.

The Oxford, England-based company will receive $100 million upfront, as well as milestone payments and royalties from successful treatments, the companies said Friday. 

This is the latest attempt by Sanofi Chief Executive Officer Paul Hudson to rejuvenate the French drugmaker’s development pipeline. Last month, Sanofi agreed to buy privately held Amunix Pharmaceuticals Inc. for as much as $1.2 billion to add promising cancer medicines. Sanofi also bought messenger-RNA development partner Translate Bio Inc. for $3.2 billion and U.S. biotech Kadmon Holdings Inc. for $1.9 billion last year.

Sanofi has been working with Exscientia since 2016. In 2019, Sanofi licensed a drug candidate from the company with targets in inflammation and immunology.

The collaboration aims to transform how new small molecule medicines for cancer and immune-mediated diseases are developed, Frank Nestle, Sanofi’s global head of research and chief scientific officer, said in a statement.

Founded in 2012, Exscientia considers itself a “pharmatech” company that uses AI and machine learning to speed up the development of small molecule drugs. Such medicines, often known as targeted therapies, can interfere with specific molecules inside cells and thus block the growth and spread of cancer. They differ from biologic agents, which include antibody therapies and vaccines.

Exscientia has more than 25 projects underway, including three AI-designed drug candidates for cancer and psychiatry that are already in early clinical trials, the company said. The company tests its drug candidates on human tissue samples in preclinical trials rather than conventional methods, which often involve mice.

Exscientia held an initial public offering of American Depository Shares last year and currently has a market value of $2.1 billion, according to data compiled by Bloomberg.

Sanofi shares were up 0.5% to 88.54 euros as of 2:30 p.m. in Paris trading.

(Updates with Sanofi CSO quote, more details throughout)

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