Insilico Secures US$888 Million Drug Development Deal After Hong Kong IPO
Insilico Medicine recently declared that they entered a significant partnership with the French pharmaceutical company Servier that is to last for many years and is worth up to US$888 million. Just a few days after the IPO, this declaration took place, which was the very event that made Insilico a publicly traded company in Hong Kong.
The partnership with Servier is focused on the co-development and research of new cancer treatments. The deal allows Insilico to collect up to US$32 million in payments upfront and in the very short term. The rest of the amount will be disbursed as the program accomplishes scientific milestones such as research achievements, clinical use, and commercialization.
On the back of this deal, Insilico will be able to make full use of its very own Pharma.AI platform that is powered by advanced A.I. to filter out the best possible drug candidates. This platform is capable of rapidly screening biological data and making new drug molecule structures without the use of the old method of screening existing chemical libraries. Thus, the technology has the potential to drastically cut down the time required for the whole process of drug discovery and development.
The multi-year agreement is a landmark both in terms of its price tag and its timing. The shares of Insilico had just started trading on the Hong Kong Stock Exchange after the IPO which generated around HK$2.28 billion (about US$293 million) and was heavily sought after by the investors. The IPO itself was an indicator of the strong market interest in AI-powered biotech companies.
However, the initial trading did not go without hiccups. The first day of trade post-announcement saw Insilico’s share price reducing by about 0.7%. Yet, the experts viewed this deal as a scoop for the company regarding the use of AI in drug-making process and delivery.
One of the key factors that Insilico’s AI platform promises to deliver is speed. The firm claims that only 12 to 18 months would be required to take a drug to human clinical trials, while the average in the industry is still about 4.5 years. Such a fast pace might lead to new drugs being made available to the public not only sooner but also at a lower cost.
Besides cancer, Insilico and its partners are looking at other diseases through the AI lens that could possibly speed up the trials and give better accuracy in diagnosing and treating them. The company’s faith in AI is just a mirror of the changing times in the pharmaceutical sector where the whole workflow of target identification, molecule behavior prediction, and clinical trials is becoming increasingly dependent on machine learning and data-driven approaches.
The partnership with Servier is expected to cover the joint research expenses since Servier will handle the clinical validation and marketing of the drug candidates when they are ready. Both firms view the collaboration as a strategic step, not only to accelerate the new treatments but also to leverage the combined knowledge base.
The fact that Insilico is able to secure a deal of this magnitude just after going public is a clear indication to the market that not only the investors but also the pharmaceutical companies are getting more and more sure about the role of AI in drug discovery. Besides, it points out the rise of Hong Kong as a hub for financing and growing biotech innovations.
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