Roche and Genentech Forge Multi-Billion-Dollar AI Drug Discovery Partnership with Recursion

Compiled by Fan Dongdong

Recently, Roche and its subsidiary Genentech signed a broad collaboration agreement with Recursion, which leverages AI-driven drug discovery.

This collaboration deal includes a massive upfront payment of $150 million. The drug development agreement also allows both parties to undertake up to 40 separate projects in the fields of neurology and oncology over the next decade. Each project is associated with potential milestone payments exceeding $300 million, along with royalties. This implies that Recursion Pharmaceuticals, Inc. could potentially earn over $12 billion if every drug discovered using their artificial intelligence technology successfully passes clinical trials and reaches the market. As Recursion puts it, this collaboration agreement is transformative.

The company will collaborate with the R&D departments of Roche and Genentech to help identify target therapies for new diseases in "key areas of neuroscience" and a single undisclosed oncology indication. Recursion's automated platform aims to integrate its computer-driven laboratory approach with traditional biological research laboratory methods. In addition to certain tumor cell lines, the two parties will also examine chemical and genetic changes in cell types related to the brain and nervous system.

Recursion's neural network will forge this information into a mathematical model of cell biology, and Roche and Genentech will study the generated datasets. Both parties will also jointly develop new machine learning algorithms to help analyze the processes behind life and disease. James Sabry, Global Head of Pharma Partnering at Roche, stated that this collaboration highlights the potential of artificial intelligence technology to transform drug discovery and objectively unveils unknown insights into complex diseases.

Currently, Recursion's projects in the fields of oncology and neuroscience will continue independently outside of the collaboration. These include preclinical work on non-small cell lung cancer, liver cancer, and other immunotherapy targets, as well as Phase 1 studies for the treatment of neurofibromatosis and cerebral cavernous malformations. The Salt Lake City, Utah-based company went public earlier this year. Riding the wave of AI-driven drug discovery, Recursion has previously completed multiple rounds of financing, accumulating nearly $500 million in total funding.

Recursion's business model can be simply summarized in three aspects: First, allocate part of the funds for self-developed product pipelines; Second, partner with pharmaceutical companies to leverage AI for drug discovery; Third, obtain licensing rights through small transactions to expand assets under research. In September 2020, Recursion reached an agreement with Bayer to use AI to discover new drugs for treating pulmonary fibrosis and other fibrotic diseases. The deal included a $30 million upfront payment and $50 million in equity financing provided by Bayer’s investment division. Under the partnership with Bayer, the two parties will initiate over 10 drug discovery programs within five years.

Reference Source: Recursion loops in Roche, Genentech for multibillion-dollar AI drug discovery deal