(Reuters) - French drugmaker Sanofi (PA:SASY) SA will partner with British AI firm Exscientia Plc to develop up to 15 drug candidates across oncology and immunology, in a deal worth up to $5.2 billion in milestone payments, the two companies said on Friday.
Exscientia will get an upfront cash payment of $100 million, leading discovery and design of small molecule drugs up to nomination of the candidate most likely to be viable. After that, Sanofi will take charge of clinical development.
Sanofi is among the many pharmaceutical giants venturing into artificial intelligence to improve accuracy and reduce time spent on research, with investment firms like SoftBank also betting big on the space.
Exscientia, which went public on the Nasdaq in October, uses artificial intelligence to discover drug molecules, especially focused on treating cancer and immune disorders, through partnerships with pharma firms such as Roche and Bristol Myers Squibb.
Sanofi and Exscientia have been working together since 2016, and if the French company commercializes a drug from the partnership, Exscientia will also be eligible for royalty payments of up to 21% of net sales.
"Typically, we have to synthesize 5,000 molecules to find that one right molecule which will be then become the clinical candidate. By applying AI, you can potentially do this by just looking at 500... So that can shorten timelines," said Frank Nestle, global head of research and chief scientific officer at Sanofi.
In November, the company invested $180 million for a 10% to 15% stake in French startup Owkin, whose predictive algorithms aim to improve the research and development of new cures against cancer.