Celgene Pays Exscientia $25 Million up Front for 3-Year AI Research Deal

UK-based Exscientia signed a three-year artificial intelligence (AI)-based drug discovery collaboration with Celgene.

As part of the deal, Celgene is paying Exscientia $25 million upfront as well as various undisclosed milestone payments. Exscientia will be eligible for tiered royalties on net sales on any product coming out of the research.

Exscientia will use its full-stack AI drug discovery platform, Centaur Chemist, to accelerate the discovery of small molecule therapeutic drug candidates. It will focus on three of Celgene’s therapeutic programs in oncology and autoimmunity.

“We’re incredibly proud to collaborate with Celgene and to sign another partnership with a key industry player, reinforcing our place at the forefront of AI drug discovery,” stated Andrew Hopkins, Exscientia’s chief executive officer. “Today, patients can wait more than 10 years from initial drug discovery to its availability as a treatment. “

Exscientia has partnered with a number of pharma companies, including Roche, GlaxoSmithKline, Sanofi and Evotec. The company raised a $26 million Series B found at the beginning of the year, which it is using to expand its technology and build its proprietary drug pipeline. The company could receive more than $1 billion in milestones from its various partnerships.

Hopkins went on to say, “With autoimmune diseases and cancer rates increasing, the pharmaceutical industry’s R&D productivity needs to dramatically improve—and technology is a key part of this. Since our pioneering Nature papers in the field, we have been developing our AI platform on the principle that AI combined with human creativity can significantly accelerate the drug discovery process and thus drastically improve access of new drugs to the market.”

Celgene is currently in the midst of an acquisition deal, with Bristol-Myers Squibb trying to buy the company for $74 billion. However, several big shareholders oppose the deal, which will likely be determined at the special shareholder meeting on April 12. Yesterday, one of those protesters, Starboard Value LP, issued an investor presentation opposing the deal, saying the deal was “ill-advised and not in the best interests of Bristol-Myers shareholders.”

One of the biggest concerns, and probably the most accurate, is that Celgene is facing “a massive patent cliff” as its blockbuster cancer drug Revlimid. The drug brought in $10 billion last year, but over the next seven years will lose about 60 percent of its earning power.

Which at least partially explains an investment in a company that might shorten the discovery and development timelines and identifies new molecules to develop.

For its part, Bristol-Myers Squibb argues that the deal will create “the number one oncology franchise” according to BMS chief executive officer Giovanni Caforio, in solid and hematologic tumors. That franchise includes Opdivo, Yervoy, Revlimid and Pomalyst. Caforio has also pointed to a cardiovascular pipeline including Eliquis, and inflammation drugs led by Orencia and Otezla.

Of the deal with Exscientia, Celgene’s corporate vice president, Chemistry, Lawrence Hamann, stated, “We are tremendously excited to collaborate with such leaders in the development and application of AI tools to accelerate drug discovery. Exscientia have a proven track record of success in this emergent field, and we believe that reducing the number of iteration cycles in optimizing structure-activity and developability relationships through their platform will very favorably impact our ability to deliver high-quality development candidates targeting unmet needs in oncology and autoimmunity.”