Eli Lilly Bets Big on AI-Driven DNA Editing with $2.25B Profluent Partnership

Intelligent Finance APP learned that pharmaceutical giant Eli Lilly (LLY.US) has reached a cooperation agreement worth up to $2.25 billion with artificial intelligence (AI) startup Profluent to find new ways to edit DNA. This is the latest move by Eli Lilly to bet on AI's ability to transform the drug development process. According to the cooperation agreement announced on Tuesday, Eli Lilly will have exclusive rights to the new drugs developed by Profluent. If these drugs reach specific milestones, Eli Lilly will pay up to $2.25 billion. The two parties did not disclose the amount of the upfront payment, nor did they specify which diseases will be focused on.

Generally speaking, it takes about 10 years and over US$1 billion to develop a new drug. About 90% of drug candidates fail before final success. Therefore, the pharmaceuticals industry is investing billions of dollars in artificial intelligence (AI), betting that AI can make the process of discovering new drugs faster, cheaper, and more successful. Although no AI-designed drugs have been approved by the U.S. Food and Drug Administration (FDA) yet, many have entered clinical trials.

Profluent's investors include Jeff Bezos, the founder of Amazon. The company stated that it can use AI to design a more powerful version of CRISPR — the Nobel Prize-winning gene-editing tool.

Profluent Aims to Treat Diseases by Inserting Large Segments of DNA into Specific Locations. According to Profluent CEO Madani, traditional drug development methods cannot achieve this. Current gene-editing tools typically only fix small errors in DNA, whereas Profluent aims to develop drugs capable of rewriting entire genetic instructions, paving the way for treating a broader range of diseases. "This has tremendous implications for genetic medicines," Madani said in an interview.

Just as ChatGPT learns through internet text, Profluent has trained its AI model using a vast database of proteins. Proteins are tiny molecular machines that perform critical functions in the human body. Scientists at Profluent input the disease they want to target into the AI model, and the technology designs potential drugs to treat that disease.

As weight-loss drugs achieve remarkable sales success, Eli Lilly is striving to build a future drug pipeline to drive the company's next phase of growth. A key part of this strategy involves increasing its investment in AI. Data shows that over the past five years, Eli Lilly has entered into at least 15 AI-related deals, more than any other pharmaceutical company.

For example, in January this year, Eli Lilly (LLY.US) announced a collaboration with Nvidia (NVDA.US) to invest $1 billion in establishing an innovation lab that leverages high-performance supercomputers to tackle challenges in the pharmaceutical industry. In the same month, Eli Lilly also partnered with Chai Discovery, a popular AI startup that raised $230 million at a valuation of $1.3 billion, to jointly develop AI models and accelerate the research and development of biologics. Last month, Eli Lilly signed a collaboration agreement worth up to $2.75 billion with Insilico Medicine, an AI-focused drug developer.

Notably, besides the application of AI in drug development, the first significant yet rarely acclaimed breakthrough AI brought to Eli Lilly occurred in the production process—specifically, the manufacturing of its popular GLP-1 class drugs: the weight-loss medication Zepbound and the diabetes drug Mounjaro. Diogo Rau, Eli Lilly's Chief Information and Digital Officer, previously stated, "Without AI, we absolutely could not have produced as much medication last year." Although he did not disclose specific figures, he mentioned that the scale of increased production was "large enough to materially impact our financial reports."

This is of great significance to Eli Lilly, as the demand for such drugs is extremely strong, but the company's production capacity is unable to meet it. To increase the production capacity of GLP-1 drugs, Eli Lilly has adopted a technology called digital twin, which uses real-time data to create a virtual mirror image of the factory, accurately representing the operating status of the physical factory. Companies can first test solutions in the digital world before applying them to the real world. Today, the use of digital twin technology to optimize manufacturing processes is becoming increasingly common.

With the help of AI and digital twin technology, Eli Lilly has significantly improved the efficiency of its production processes, achieving drug yields far exceeding those of traditional models. By modeling every aspect of the factory—from equipment and raw material inputs to production steps—the company uses digital twin models to simulate different configurations and identify the optimal solution. Diogo Rau stated, "We initially thought the results seemed too good to be true, but the actual production outcomes matched the predictions of the digital twin perfectly."