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Allen & Overy has advised Exscientia on its USD674 million AI drug discovery collaboration with Merck KGaA

Collaboration will leverage Exscientia’s precision design capabilities to focus on previously unsolved drug design challenges.

On 20 September, Exscientia plc (Exscientia) announced a new collaboration with Merck KGaA, Darmstadt, Germany (Merck) focused on the discovery of novel small molecule drug candidates across oncology, neuroinflammation and immunology. The multi-year collaboration will utilise Exscientia’s AI-driven precision drug design and discovery capabilities while leveraging Merck KGaA, Darmstadt, Germany’s disease expertise in oncology and neuroinflammation, its clinical development capabilities and global footprint.

Three potential first-in-class or best-in-class targets have already been identified as the initial focus of the partnership. Under the terms of the agreement, Exscientia will receive an upfront cash payment of USD20 million from Merck and will be eligible for discovery, development, regulatory and sales-based milestone payments of up to USD674 million in aggregate, if all milestones for all three initial programmes are achieved. If Merck commercialises a therapeutic from one of the initial targets of the collaboration, Exscientia will receive tiered royalties on product sales ranging from mid-single-digits to low-double-digits.

Jim Ford, co-head of life sciences at A&O, commented: “We’re delighted to have had the opportunity to support Exscientia once again on another strategic and landmark transaction, and proud to demonstrate the capability of our transactional offering on complex AI-driven deals.”

The A&O team was led by London-based partner and global co-head of Life Sciences, Jim Ford , and London-based transactional IP associate, Megan McMellon.