AstraZeneca Signs $555 Mn AI Deal to Identify Immunology Targets

The deal gives AstraZeneca exclusive rights to develop and commercialize therapies using Algen’s gene-editing platform based on CRISPR technology.

Global pharma giant AstraZeneca has signed a $555 million agreement with Algen Biotechnologies, a San Francisco-based company specializing in artificial intelligence, making it the latest pharmaceutical player to invest in AI-driven drug development.

The deal gives AstraZeneca exclusive rights to develop and commercialize therapies using Algen’s gene-editing platform based on CRISPR technology.

Algen, which originated from the Berkeley lab of Nobel laureate Jennifer Doudna, will receive milestone-based payments totalling up to $555 million. AstraZeneca will not take an equity stake in the company.

Algen has previously raised $11 million and received a $350,000 grant from the National Institutes of Health in 2021 for cancer research.

While AI is being adopted to enhance drug testing and shorten development timelines, few AI-discovered drugs have advanced to late-stage clinical trials, and none have received regulatory approval so far. Despite growing investments, experts caution that the field is still in its early stages.

“With AI, I think we are definitely in a period of hype at the moment,” said Jim Weatherall, AstraZeneca’s Chief Data Scientist. “Today, I think our way of controlling the hype is to carefully introduce AI as a tool for the company’s scientists,” he added.

He noted that AI is not a cure-all for drug development. “While sometimes it is overhyped, you don’t want to downplay it either because the potential of this technology is huge.”

Pharmaceutical companies are increasingly turning to AI tools to reduce costs and improve efficiency. In 2023, Roche partnered with Nvidia on drug development, and AstraZeneca began working with BenevolentAI in 2019 on lung and kidney diseases. Despite BenevolentAI’s delisting after a 99 per cent share decline, AstraZeneca confirmed that the partnership remains active.

Algen, which has used machine learning for oncology research, will collaborate with AstraZeneca on immune system disorders.

“We are not just analysing data using AI,” said Chun-Hao Huang, Algen’s Co-founder. “Rather, AI and CRISPR are being paired together to generate solutions.”

Industry analysts say that up to 90 per cent of new drugs fail during clinical trials, highlighting the need for pharmaceutical companies to benchmark AI’s performance against conventional methods.

“For now, the role of the pharma industry in AI is very limited when it comes to early stage drug discovery,” said Alex Zhavoronkov, Chief Executive of Insilico, an AI-focused drug discovery company.

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