Merck Bets Big on AI-Powered Drug Development with $376 Million Deal

In a move to bolster its drug discovery efforts, German pharmaceutical giant Merck KGaA has announced a major collaboration with Israeli biotech company BiolojicDesign. The deal, valued at an estimated $376 million, will leverage Biolojic's artificial intelligence capabilities to help Merck develop novel multi-specific antibodies.

The partnership includes an upfront payment in the "low double-digit million euro" range, as well as potential milestone payments for discovery, development, regulatory, and commercial achievements. Merck will also provide funding for Biolojic's related research and development work. Additionally, Biolojic will be eligible for tiered royalties on product sales.

Biolojic, founded in 2010 and with a research lab in Boston, is focused on developing cancer and other disease therapies based on human antibodies. The company has developed a novel computational software and bioengineering approach to redesign antibodies to bind to new epitopes, or antigenic sites. By using proprietary algorithms and statistical analysis, Biolojic can efficiently identify antibodies that can bind to functional epitopes on antigens.

Through this collaboration, Merck aims to leverage Biolojic's AI-powered antibody generation platform to develop cancer drug candidates, including antibody-drug conjugates (ADCs) and immunotherapies. Biolojic believes that its AI-designed antibodies can be more specific, serving as "programmable switches" with the potential to improve efficacy.

"In this collaboration, we will leverage Biolojic's multi-functional capabilities to create the next generation of antibody-based therapies, including those that may be able to block tumor escape mechanisms, overcome tumor and patient heterogeneity, and provide better safety and efficacy, including for ADCs," said Yanay Ofran, Biolojic's CEO.

This partnership marks Merck's second AI-powered drug discovery collaboration announced in 2024. In April, the company teamed up with AI biotech firm Caris Discovery to develop ADC therapies. Merck has been actively exploring the integration of AI technology into its drug development efforts, having also established partnerships with BenevolentAI and Exscientia in 2023 for small molecule drug discovery.

As the pharmaceutical industry continues to embrace the potential of AI to streamline the drug development process, reduce costs, and improve decision-making, it is likely that we will see more strategic collaborations between traditional drug makers and AI-powered biotech companies in the years to come.