Amid 'biotech winter,' Insilico turns up the heat with Sanofi deal worth $1.2B in biobucks

Insilico Medicine is radiating heat amid the biotech winter, kindling its fires with a Sanofi collaboration that could be worth up to $1.2 billion in biobucks—the AI drug discovery company’s largest deal to date. 

“It’s the golden time for Insilico,” CEO Alex Zhavoronkov, Ph.D., told Fierce Biotech. The pact validates the Hong Kong-based company’s platform and methods, particularly against the backdrop of the ongoing “biotech winter,” the CEO said.

The freshly inked multiyear research deal gives Sanofi access to Insilico’s AI platform, dubbed Pharma.AI, to advance drug development candidates for up to six targets. The Big Pharma will pay out up to $21.5 million to cover the upfront and target nomination fees, with further milestone payments stretching to over $1.2 billion in addition to tiered royalties.

For Sanofi, it's just the latest AI-driven drug delivery partnership following deals with the likes of Exscientia and Owkin. Though Sanofi hasn’t disclosed what indications it’s looking at, the French drugmaker expects the partnership will help “achieve synergy and accelerate drug discovery to advance our emerging pipeline at the Sanofi Institute for Biomedical Research in China,” Sanofi Global Head of Research and Chief Scientific Officer Frank Nestle, M.D., told Fierce Biotech via email.

Sanofi is a good fit for Insilico because of its global reach, with neither company shy about its presence in Asia, Zhavoronkov explained. 

Sanofi is more transparent and efficient than other Big Pharmas, according to Zhavoronkov, which is why Insilico has granted the company access to all its software for discovering targets and designing molecular structures. Insilico doesn’t typically provide its entire suite of tools when working with small biotechs, he pointed out.

The deal comes as the industry rapidly consolidates, according to the Insilico founder, which is why he thinks Big Pharmas are choosing partners that appear likely to stay afloat.

“Many biotechnology companies are trading below cash … and many AI-powered drug discovery companies have gone under because the market conditions aren’t great,” the CEO explained. “Many of them just didn’t prove their worth to the market [or] that they have a good chance of survival.”

In contrast, Zhavoronkov believes Insilico has already demonstrated its value. In January, the company teamed up with Shanghai Fosun Pharmaceutical, hitting its first milestone just five weeks after the deal was announced, a feat the CEO said caught the eye of many other companies—including Sanofi.  

While Insilico would welcome further partnerships, it will have to balance these commitments with the need to keep its internal pipeline resourced, Zhavoronkov said. The company currently has 31 programs across fibrosis, oncology, immunology, the central nervous system and aging-related disease. Its first AI-discovered drug is currently the only asset in the clinic and is being evaluated in a phase 1 study in patients with idiopathic pulmonary fibrosis.

“We’re growing like crazy right now in this market,” Zhavoronkov said. “And we’re not doing acquisitions—we’re growing our internal capabilities.”

This June, the company raised $60 million in a series D financing round, adding on another $35 million two months later. The money will help advance its pipeline, as well as put the finishing touches to a fully AI-guided lab. “No humans allowed,” Zhavoronkov explained with a chuckle.         

Insilico also plans to expand globally, specifically in locations in Montreal and Abu Dhabi. Zhavoronkov was particularly excited about the growth plans in the Middle East, especially considering that Insilico closed up its R&D operations in eastern Europe amid the Russian invasion of Ukraine.

Ultimately, the company is going to continue ratcheting up the heat—all in the name of creating good, the CEO concluded.