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Merck KGaA has announced two new strategic partnerships with Benevolent AI and Exscientia to support its artificial intelligence (AI)-driven drug discovery plans. Benevolent and Exscientia plan to leverage Merck KGaA’s expertise in oncology and neuroinflammation under the collaboration.

As part of the agreement, the companies have collectively selected three potential first-in-class and best-in-class targets. The partnership will focus on finding viable small molecule candidates for development that Merck KGaA will choose for further preclinical and clinical development.

In this deal, announced on 20 September, BenevolentAI will be eligible for payments of up to $594 million, including a low double-digit million-dollar immediate payment. Further payments will be made according to future discovery, development and commercial milestones. Also, the London, UK-based company could receive tiered royalties on net sales of any commercialised products. BenevolentAI is already collaborating with AstraZeneca and Eli Lilly for AI-driven drug discovery.

In May, BenevolentAI announced intentions to reduce spending and free up to £45 million ($55.6 million ) of net cash to improve its financial flexibility. The company planned to achieve budget cuts by reducing facility and operating expenses and laid off 180 employees.

Aside from this, the company proposed plans to prioritise its drug programmes for BEN-8744 and BEN-28010 and earlier-stage assets in neurodegenerative and immunological diseases. BEN-8744 is a PDE10 inhibitor for the treatment of ulcerative colitis and BEN-28010 is a CHK1 inhibitor for the treatment of glioblastoma multiforme.

Under the collaboration, the Oxford, UK-based Exscientia will receive an upfront cash payment of $20m from Merck with the potential to earn milestone payments of up to $674m in aggregate, if all milestones for all three initial programmes are achieved. The company will recognise the $20m payment on its H2 2023 results as cash inflows. Merck KGaA may also give Exscientia tiered royalties on sales ranging from mid-single-digits to low-double-digits.

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In a press release, Danny Bar-Zohar, Merck KGaA’s chief medical officer said, “The partnerships with industry-leading AI technology firms BenevolentAI and Exscientia will complement our internal research capabilities and expertise, aligning with our broader strategy to enhance.”