San Francisco’s biotechnology startup Verge Genomics, a drug discovery company utilizing an AI platform, has received its largest investment from Alexion — the rare disease branch of AstraZeneca plc (NASDAQ: AZN) (LON: AZN).
Verge announced the US$42 million investment and four-year agreement on Friday, which it says could potentially evolve into a deal valued at US$840 million plus royalties. The partnership will utilize Verge’s CONVERGE platform, which combines the power of machine learning with human tissue datasets from patients with different disorders to develop novel efficacious drugs.
Through the deal, Alexion will be selecting drug candidates discovered through the platform that show strong potential for treating different neurodegenerative and neuromuscular diseases and will have the option to develop, license and commercialize them.
Verge says its approach to drug discovery has been validated by its success in developing treatments for amyotrophic lateral sclerosis (ALS). The company announced positive safety and tolerability data for one of its ALS treatment drugs from a Phase I clinical trial in June and is also in the midst of developing different treatments for Parkinson’s.
Additionally, AstraZeneca will be taking an equity position in Verge alongside major investors such as the multi-trillion dollar investment firm BlackRock Inc (NYSE: BLK) and the Global Health Innovation Fund owned by the company’s first major pharmaceutical investor Merck & Co Inc (NYSE: MRK).
“By leveraging Verge’s AI-enabled platform in combination with data from patient tissue samples, we see potential in helping researchers more efficiently identify and validate therapeutic targets for rare diseases,” said Seng H. Cheng, Senior Vice President, Head of Research and Product Development at Alexion.
Verge’s Chief Business Officer Jane Rhodes says the partnership will leverage the combined power of the company’s AI platform with Alexion’s expertise in developing and commercializing treatments for rare diseases.
“We believe that our work with Alexion will build on our achievements in central nervous system drug discovery and is indicative of the sustained interest from pharma in the potential of AI to transform drug discovery and development,” said Rhodes.
The vaccine manufacturer AstraZeneca invested €300 million in Alexion’s College Park pharmaceutical facility in Dublin in the fall of 2021.
Verge’s CEO Alice Zhang was recognized as one of Fortune magazine’s 40 under 40 business influencers last year. The company raised US$98 million in a series B funding round in December 2021.
AstraZeneca shares dropped by 2.4 per cent Monday to US$66.60 on the Nasdaq exchange.