AI Pharma Deals: Bayer and AI Startups

AI Drug Discovery

By Marina T AlamanouPublished 3 years ago • 11 min read

How Bayer adopts AI to boost drug discovery

So far, the pharmaceutical industry has contributed more to the well-being of humanity than any other industry. But lately its business model has been under significant pressure since the return on R&D investment has dropped to its lowest level in decades (lack of innovation amid digital disruption, rapid technological advances and other issues such as lack of data reproducibility) and its public reputation in US and around the world (anti vaccine movement in Europe) is worse than ever.

This worrisome mix of little growth potential and low reputation is the main reason why investors are increasingly worried, not to mention that the current drug development process needs a big dose of digital innovation to deal with its messy data.

As a matter of fact, Stefan Oelrich member of the Board Management of Bayer AG, President Pharmaceuticals, wrote in an article — that the title perfectly summarises the AI pharma situation "Artificial Intelligence - When we Suddenly Know What we Don’t Know" — the following:

"As we open the first doors in this unknown land we start to discover how much more is out there for our entire pharmaceutical value chain spanning from research to product supply. I expect AI to help us know what we have not known so far. Artificial Intelligence will become instrumental in our search for new medicines to better serve patients around the world as we leverage Science For A Better Life". — Stefan Oelrich

So, it is not a surprise that Buyer launched in 2019 a 🖊🖥💊 LifeHub in UK focused on Artificial Intelligence to optimize data-driven drug discovery and disease diagnosis, to boost collaborations with external partners that will drive development of AI-enabled radiology (imaging). In fact, in 2019 Bayer and Sensyne Health (a clinical AI startup 🚀 with MagnifEye an AI-powered software product that transforms any smartphone into an easy-to-use Lateral Flow Test reader/ raised a total of £27.5M in funding over 1 round) have expanded their previous AI collaboration into a larger, international project based in the UK focused on developing new cardiovascular disease treatments using AI (AI-enabled radiology and imaging), with Bayer’s LifeHub UK playing a role. And in 2020 Bayer strengthened its ties with the Scottish AI developer Blackford Analysis (digital health top startup 🚀 backed by Bayer, raised a total of £4.1M in funding over 5 rounds) to build a one-stop shop for applications in medical imaging.

But let's now see the AI Bayer agreements relevant to drug discovery:

🖊🖥💊In 2020, Bayer announced a collaboration agreement with the AI drug discovery company Exscientia to identify and optimise novel lead compounds as potential drug candidates in treating cardiovascular and oncological diseases, with Exscientia receiving up to $266 million (€240 million) in upfront and research payments, as well as near-term and clinical milestones.

“Since our pioneering Nature papers demonstrated the automated design of small-molecules, we have enhanced our platform and exemplified it commercially, by accelerating the discovery of future drug molecules with partners. We’re excited to now work with Bayer researchers to drive this transformational change in key therapeutic areas.” — Exscientia CEO Andrew Hopkins

Exscientia Ltd 🚀(Oxford UK, 2012) is the first company to automate drug design and its knowledge-driven systems (Centaur AI, as well as AI Pharmatech platforms) design millions of novel, project-specific compounds and pre-assess each for predicted potency, selectivity, ADME and other key criteria. From this, a selection of the best, information-rich compounds are selected for synthesis and assay. On March 2021, Exscientia announced it has raised $100 million in a Series C financing round (a total of $147.9M), by BlackRock, as well as existing investors, including Evotec, Bristol Myers Squibb and Novo Holdings, the last of which led the first Series C. Exscientia has acquired Kinetic Discovery Ltd. on Nov 15, 2018, a company that offers drug discovery services as hit identification, confirmation and validation.

🖊🖥💊 In 2020, Bayer and Atomwise, a leader in AI for drug discovery, announced that both companies will continue the development of two crop protection programs.

“The development of chemical compounds for agriculture is as challenging as it is for drug development.” — Dr. Abraham Heifets, CEO of Atomwise

Atomwise 🚀(San Francisco US, 2012) is a pioneer of harnessing AI for drug discovery. Atomwise invented the first deep-learning AI technology for structure-based small molecule drug discovery (publications) and holds patents (19 issued and 12 pending patent applications) for applying convolutional networks to spatial data. Atomwise performs hundreds of projects per year in partnership with some of the world’s largest pharmaceutical and agrochemical companies, as well as more than 200 universities and hospitals in 40 countries. Their strategy is "Drug The Undruggable", since the majority of the human genome remains undrugged. And they leverage a technology similar to that used for image recognition to help medicinal chemists to discover better medicines and faster. Atomwise has raised a total of $176.6M.

🖊🖥💊 In 2020, a strategic collaboration was announced that will leverage Recursion’s purpose-built artificial intelligence-guided drug discovery platform and Bayer’s small molecule compound library and deep scientific expertise to discover and develop new treatments for fibrotic diseases of the lung, kidney, heart and more. Under the terms of the agreement, the parties can initiate more than 10 programs with possible development and commercial milestone payments of more than $100 million per program plus royalties on future sales. In addition to the $50 million equity investment, Recursion will receive an upfront payment of $30 million.

“We have the potential to elucidate novel biological pathways, targets and chemical entities across large disease domains such as fibrosis, neurodegeneration, neuroinflammation and targeted oncology, which we believe will form the basis of early partnerships with key pharma stakeholders.” — Chris Gibson, PhD, co-founder and CEO of Recursion

Recursion Pharmaceuticals 🚀(Utah US, 2013) combines experimental biology, automation and AI in a massively parallel system to quickly and efficiently identify treatments for any disease. In particular, at Recursion’s headquarters, clusters of robots treat millions of cells per week with drugs, stain them with six dyes and then take pictures/images to capture and quantify as many morphological features as they can. By pushing these data through a ML pipeline, they hope to find relationships that are invisible to the human eye and to tease out clusters of effects that can guide their drug discovery efforts. Recursion Pharmaceuticals has raised a total $465.4M.

🖊🖥💊 In 2017, Turbine has partnered with Bayer to develop new applications for its existing cancer drugs. Bayer chose Turbine from 400 applicants for its open innovation programme. Pfizer also showed interest, picking the company for its Biotech Partnering Days.

"The basic principle of science is that you don’t know what you think you know until you’ve conclusively proven it. This is why we’re rigorously testing Turbine’s predictiveness to show just how effective this technology is, and where it can grow in years to come.” — Szabolcs Nagy, co-founder and CEO of Turbine

Turbine 🚀 (Budapest, Hungary, 2015) is building a platform (Simulated Cell technology) to understand the inner mechanisms of cancer, enabling the discovery of novel protein targets, precision biomarkers and better translation to patients. They run thousands of simulated experiments and have built a computational model of human cell biology that uses AI to predict how cancer cells respond to drugs and finds new targets, biomarkers and therapies. Turbine has raised a total of €8.7M in funding over 3 rounds.

🖊🖥💊 In 2018 Cyclica has joined Bayer's Grants4Apps program as one of six finalists selected from over 1800 applicants globally. And as part of Bayer's G4A, Cyclica will work alongside mentors at Bayer to accelerate the deployment of its novel, patented and first-in-class Differential Drug Design (DDD) technology, which has been in development for nearly two years. DDD, is a novel and patented metaheuristic genetically inspired AI technology that de novo designs new chemical entities (NCEs) across a panel of desirable and undesirable anti targets to achieve multi-targeted drug design & lead optimization. Moreover, in December 2018 Merck announced a partnership with Cyclica to use its AI-augmented proteome screening platform to elucidate mechanisms of action, evaluate safety profiles and explore additional applications for investigational small molecules.

“The high attrition rate of late-stage clinical trials is not only costly to the industry as a whole, but also adversely impacts patients. Reducing up front risk is key to downstream success, and that’s why the pharmaceutical industry is actively seeking, and investing in, new ways to make early go/no-go decisions to save money and time. Bayer G4A and Cyclica have a shared priority: to get better medicines in the hands of patients faster. To advance our vision requires continuous and rapid innovation, and Bayer G4A provides us the platform to do just that.” — Naheed Kurji, Cyclica’s President and CEO

Cyclica 🚀 (Toronto, Canada 2013) has a computational approach (a first-in-class-proteome screening technology as part of Ligand Express) to polypharmacology unique in the industry, by using a proteome-wide lens to evaluate multiple novel and rare on and off-target interactions simultaneously. The technology is actively being used by scientists at leading global pharmaceutical companies to understand the polypharmacology of drug molecules. Ligand Express: is Cyclica's flagship technology and the only drug-centric, structure-based (computationally biophysical) platform that is supported by AI and ML techniques, that provides insights into a drug’s polypharmacology (i.e off-target interactions) for the pharmaceutical, nutraceutical and cosmeceutical industries. Cyclica has raised a total of $23.8M in funding over 7 rounds.

🖊🖥💊 In 2020, Bayer has entered into an exclusive global license agreement with Systems Oncology LLC, for ERSO a compound in pre-clinical development for metastatic Estrogen Receptor positive, breast cancer. Under the terms of the agreement, Bayer will be responsible for developing and commercializing ERSO globally. Systems Oncology will receive an upfront payment of 25 million US dollars and is eligible to receive payments from Bayer upon achievement of certain development, and commercialization milestones totaling 345 million US dollars, as well as royalties on future global net sales.

“Given ERSO’s potential in cancer care, it was important for us to align with a sophisticated group that understands innovation. Bayer is a proven innovator who shares our vision for ERSO, and they have the clinical, scientific, and business leadership to succeed,” — Dr. Spyro Mousses, CEO and Co-Founder of Systems Oncology

Systems Oncology (SO) 🚀 (Arizona, United States 2015) is an AI-based cancer therapy discovery and development company. SO has a multidisciplinary team of scientists and a revolutionary cognitive computing platform (Expansive.AI) able to intelligently integrate, model and mine big data from hundreds of molecular, genomic and biomedical datasets. This new kind of computational data mining has empowered the SO team to rapidly extract many therapeutically useful insights from complex multi-scalar systems models of cancer biology.

🖊🖥💊 In 2020, Schrödinger and Bayer announced a 5 year technology alliance to develop a comprehensive de novo design solution with the objective to accelerate the discovery. The de novo design software will integrate Schrödinger’s molecular design technology (LiveDesign), based on physics-based modeling augmented by ML, with Bayer’s proprietary in silico models predicting compound absorption, distribution, metabolism, excretion, toxicity (ADMET) and chemical synthesis. Under the terms of the agreement, Schrödinger is expected to receive about €10 million.

“The de novo design solution, built on the complementary strengths of Schrödinger and Bayer, holds the promise of accelerating the discovery of novel medicines for important unmet needs.” — Schrödinger CEO Ramy Farid, Ph.D

Schrödinger 🚀(New York US, 1990) is involved in computational drug designing for pharmaceutical and biotechnology research. It provides platforms to conquer drug discovery, materials research and molecular modeling. Schrödinger’s platform aims to predict how strongly a potential drug will bind and affect a target protein with the goal of optimising its chemical properties and reducing the number of compounds that need to be synthesised before settling on a lead candidate. Schrödinger has raised a total of $562.3M in funding over 8 rounds, and has a post-money valuation in the range of $500M to $1B as of May 20, 2019.

🖊🖥💊 In 2017 Berkeley Lights announced a strategic project with Bayer, focused on the innovation and acceleration of cell line development, antibody discovery and research. As part of the program, Bayer will use Berkeley Lights' Beacon platform to automate biological workflows and gain efficiencies in its drug development process.

"The Beacon platform brings increased scalability and precision to the discovery and development process. Now Bayer can screen thousands of clones to identify the highest producers with even more precision and speed." — Eric Hobbs, PhD, CEO at Berkeley Lights, Inc

Berkeley Lights 🚀 (California US, 2011) provides technology solutions for antibody discovery, cell line development, cell therapy development and synthetic biology for life science research in order to automate drug discovery/development and genomic research. Their mission is to accelerate the use of cell-based products by providing researchers access to the Berkeley Lights Platform to find the best cells in a fraction of the time and at a fraction of the cost of traditional methods. Berkeley Lights has raised a total of $208.5M in funding over 8 rounds and has a post-money valuation in the range of $500M to $1B as of Oct 15, 2018.

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