Merck Expands AI Capabilities with $349M Variational AI Deal

Merck & Co. has significantly bolstered its artificial intelligence (AI) capabilities in drug discovery through a new collaboration with Variational AI. The deal, worth up to $349 million, aims to leverage AI technology to tackle challenging drug targets and accelerate small molecule development.

Strategic Partnership for AI-Driven Drug Discovery

Merck has entered into a partnership with Variational AI, building upon their existing relationship. The collaboration focuses on using Variational's Enki technology, a generative AI platform, to design and optimize novel small molecule candidates against two undisclosed targets selected by Merck.

The agreement includes an undisclosed upfront payment and potential milestone payments, bringing the total value to $349 million. Merck will retain exclusive rights to develop and commercialize any compounds resulting from this partnership.

Enki Technology: Revolutionizing Target Product Profiles

Variational AI's Enki platform utilizes generative AI models to propose small molecules based on target product profiles (TPPs) provided by users. This approach has shown promise in Merck's initial assessments, leading to the expanded collaboration.

Robert Garbaccio, Ph.D., head of discovery chemistry at Merck Research Laboratories, highlighted the challenging nature of the selected targets, underscoring the potential of AI in addressing complex drug discovery problems.

Merck's Growing AI Initiatives

This partnership represents Merck's latest move in embracing AI technologies across its operations. Earlier this year, the company revealed its collaboration with McKinsey & Company and QuantumBlack to develop large language models for generating clinical study report drafts. This initiative has already demonstrated significant time savings, reducing draft creation time from 2-3 weeks to just 3-4 days.

As the pharmaceutical industry continues to explore the potential of AI in drug discovery and development, Merck's strategic investments and partnerships position the company at the forefront of this technological revolution.