Sanofi makes AI play, putting up $100M and billions in biobucks to form broad deal with Exscientia

Sanofi is getting deeper into AI-driven R&D. After working with AI drug discovery shop Exscientia for five years, Sanofi has significantly expanded its relationship, putting up $100 million and $5.2 billion on the backend for the chance to work on up to 15 small molecules across oncology and immunology.

Exscientia has emerged as a notable player in the nascent AI space in recent years, landing deals with drug developers such as Bristol Myers Squibb and pulling off a mammoth $510 million IPO. The interest is underpinned by a platform that has delivered three AI-designed drug candidates to the clinic and, in the view of Exscientia, can identify binding sites on proteins previously deemed to be undruggable.

Sanofi likes the look of the technology. In return for $100 million upfront, the Big Pharma has entered into a deal to use Exscientia’s AI-based capabilities from target identification through to patient selection on up to 15 small molecules across oncology and immunology.

“Our expanded collaboration with Sanofi will utilize the breadth of our platform to test AI-designed drug candidates against patient tissue models, potentially providing far better accuracy than conventional approaches such as mouse models. When you consider the change this represents—testing candidates against actual human tissue years before a clinical trial—it’s transformative,” Exscientia CEO Andrew Hopkins said in a statement.

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As the molecules covered by the deal advance, Exscientia could enjoy some big paydays. The milestones total $5.2 billion and Exscientia is also in line to receive high-single-digit to mid-teen tiered royalties on product sales. The deal allows Exscientia to co-invest in clinical work for a royalty rate of up to 21% on net sales. 

Those figures make the Sanofi agreement Exscientia’s biggest deal to date. Exscientia also has a sizable deal with Bristol Myers that, when the original agreement with Celgene is factored in, has generated $55 million in upfront payments and a $20 million option fee. Exscientia also has its eyes on up to $125 million in near-term milestones that form part of a potential $1.3 billion package.

Sanofi originally made a smaller bet on Exscientia when it formed a research collaboration and licensing agreement in 2016. Three years later, Exscientia delivered a bispecific lead molecule with applications in inflammation and fibrosis. The project could net Exscientia $250 million in milestones but the sums involved are smaller for now. Sanofi provided Exscientia with a little more than $1 million to fund initial research efforts and in relation to the exercising of its option on the bispecific in 2019.

The candidate is designed to hit two distinct targets in inflammation and immunology, making it an early test case for Exscientia’s belief that its platform can deliver small molecule versions of a design category currently largely limited to biologics.