GERMANY — Bayer and Recursion Pharmaceuticals have unveiled an ambitious pivot in their research collaboration, now setting their sights on precision oncology in a deal that could soar to a staggering US$1.5 billion.
Juergen Eckhardt, Head of Business Development, Licensing, and Open Innovation at Bayer’s Pharmaceuticals Division, lauded Recursion’s use of artificial intelligence (AI) in drug discovery, deeming it potentially one of the most disruptive technologies of our time.
The roots of this collaboration trace back to 2020 when the companies joined forces for digitally-powered drug discovery targeting fibrotic diseases.
This collaboration, accompanied by a US$50-million investment led by Leaps by Bayer in Recursion’s Series D financing, laid the foundation for their partnership.
A year later, the collaboration expanded to incorporate Recursion’s inferential search capabilities based on its intricate maps of human cellular biology.
Recursion’s innovative platform leverages advanced machine learning to analyze over 5 trillion biological and chemical relationships within its proprietary datasets, doing so efficiently and with minimal bias.
Covering 50 human cell types and a library of 1.7 million small molecules, Recursion’s system operates with the support of the BioHive-1 supercomputer.
In this strategic move, the companies have the leeway to initiate up to seven oncology programs, with Recursion standing to gain success-based payments of up to US$1.5 billion plus royalties on net sales.
Additionally, Bayer holds the option to exclusively license novel therapeutics stemming from this collaborative research.
Dominik Ruettinger, Global Head of Research and Early Development for Oncology at Bayer, emphasized the need for an individualized approach to cancer treatment, highlighting Bayer’s commitment to innovative therapies for nearly half of its pharma pipeline.
Bayer Co.Lab incubator in China and strategic considerations
In tandem with this collaboration, Bayer Pharmaceuticals and Shanghai Pharmaceuticals are set to establish the Bayer Co.Lab incubator, fostering deep cooperation with local R&D institutions and innovative companies in China.
Positioned at the SPH Biopharma Industrial Campus, slated for completion soon, this incubator signifies Bayer Co.Lab’s inaugural presence in China, expected to be the largest site in the Asia-Pacific. Operations are slated to commence in the second half of 2024.
On another front, Bayer is contemplating a potential separation from its consumer health or crop science divisions, as revealed by new CEO Bill Anderson.
The company is exploring options to revive its share price, including a sequential split into three companies or maintaining all three divisions.
Anderson hinted at potential initial public share offerings or spin-offs without raising cash, with further details anticipated during a capital markets day in March.
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