Los Angeles-based Renovaro Inc (NASDAQ: RENB) will soon enhance its AI-powered drug discovery capabilities through a new merger deal.
On Monday morning, Predictive Oncology Inc (NASDAQ: POAI) announced that it had signed a binding agreement to be taken over by Renovaro. Definitive documentation is expected to be completed by the end of next month. Renovaro will need to raise at least US$15 million for the deal.
By acquiring Predictive Oncology, Renovaro will gain access to a large-scale biobank comprised of over 150,000 tumour samples, decades of drug data and 200,000 valuable pathology (study of disease) slides.
Predictive Oncology shareholders will receive one newly created preferred stock of Renovaro for each share held, which can be redeemed for US$3.00 apiece after 1.5 years.
“This transaction with Predictive Oncology furthers our quest to offer cancer patients early diagnosis, personalized treatment protocols and recurrence monitoring,” Renovaro CEO, David Weinstein, said in a news release.
Predictive Oncology is known to have collaborated with Cancer Research UK to help develop cancer treatment drugs by utilizing its proprietary “PEDAL” AI platform. The company claims this platform is 92 per cent accurate at predicting if a cancer tumour sample will respond to a particular drug compound.
Renovaro’s drug pipeline is comprised of development-stage cancer vaccines, HIV treatment drugs and a Hepatitis B gene therapy. The oncology company has strategic partnerships with the University of California, Seattle’s Fred Hutchinson Cancer Research Center and the disease research organization Caring Cross.
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AI-powered drug discovery market set to go gangbusters
Multiple researchers believe that the sector these two companies are involved with is in the early stages of immense growth.
MarketsandMarkets, Vantage Market Research and Precedence Research have all predicted that the AI drug discovery industry will expand with a compound annual growth rate (CAGR) ranging between 20 and 30 per cent for the remainder of the decade.
By 2030, the industry will be worth between US$7 billion and US$10 billion, approximately.
Fortune Business Insights predicts robust growth too, but only a 12.2 per cent CAGR. It says the neurology drug segment will be the most popular.
AI has been helping to significantly reduce the amount of time involved with identifying and developing new therapeutics for cancers and other diseases while lowering costs substantially.
rowan@mugglehead.com
