Pharmaceutical major Eli Lilly has reached a $2.75 billion deal to bring drugs to the global market by using artificial intelligence (AI) from Hong Kong-listed Insilico Medicine, the company announced on Sunday (local time).
Eli Lilly-Insilico agreement
CNBC reported that under the agreement, Insilico will receive $115 million up front, with additional payments tied to regulatory approvals and commercial milestones, as well as royalties on future sales, according to the companies’ announcement on Monday.
Additionally, under the agreement, Lilly will obtain an exclusive licence to develop, manufacture, and commercialise Insilico Medicine’s preclinical oral drug candidates in selected disease areas, the Hong Kong-listed company said in a regulatory filing.
At least 28 Insilico drugs developed using Gen AI: CEO
The Hong Kong-listed generative AI drug developer has so far developed at least 28 drugs using generative AI tools, with roughly half of them already at a clinical stage, Alex Zhavoronkov, founder and CEO of Insilico, told CNBC. The company, which went public in Hong Kong in December last year, had its shares up over 50% year-to-date. Zhavoronkov added that in many ways, Lilly outperforms Insilico, and noted that the US pharma giant has “one individual” who has successfully integrated biology, chemistry, and automation within a single framework. He also noted that, as part of the agreement, Insilico will become part of Lilly’s Gateway Labs community for biotech development.
Lilly and Insilico have been working together since 2023, following the signing of an AI-based software licensing agreement.
Insilico develops its AI technologies outside China, primarily in Canada and the Middle East, while carrying out early-stage preclinical drug development in China based on that research, Zhavoronkov said. He added that, beyond shortening research timelines, AI can generate and synthesise molecules more rapidly than traditional discovery methods.
Eli Lilly on collaboration with Insilico
Andrew Adams, group vice president of Molecule Discovery at Lilly, said in a statement, “This collaboration allows us to explore novel mechanisms and accelerate the identification of promising therapeutic candidates across multiple disease areas.” He called the Hong Kong-listed company’s AI-enabled discovery a powerful complement to Lilly’s clinical development capabilities.
Lilly announces plans to invest $3 billion in China
David A. Ricks, the company’s CEO, attended a high-level forum in Beijing earlier this month, shortly after Lilly announced plans to invest $3 billion in China over the next decade. The company also reported that just under three percent of its revenue came from China last year. The US pharma giant also announced plans to boost its manufacturing capacities and local supply chains in the country, thereby deepening the footprint of foreign pharmaceutical companies in the world’s second-largest healthcare market.
Pharma companies shift focus on AI to boost R&D
According to Reuters, pharma companies are now increasingly turning to AI to boost research and development, relying on advanced modelling tools and automated laboratories to improve efficiency across their pipelines. This shift also aligns with efforts by the US Food and Drug Administration (FDA) to reduce animal testing in the near future.
- The partnership signifies a growing trend of integrating AI in pharmaceutical R&D.
- Eli Lilly’s investment reflects its commitment to enhancing its manufacturing and supply chain in China.
- AI is poised to revolutionize drug discovery by improving efficiency and reducing reliance on traditional methods.
