Tech-First Companies Take the Lead in AI Drug Discovery

by Andrii Buvailo, PhD          Biopharma insight

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In recent news, Recursion (NASDAQ: RXRX), a prominent clinical stage TechBio firm, has announced the signing of agreements to acquire Cyclica and Valence, two companies with expertise in AI-enabled drug discovery. These acquisitions strengthen Recursion's position in computational chemistry, machine learning, and artificial intelligence, enhancing its technology-enabled drug discovery capabilities in the biopharma industry.

Cyclica, based in Toronto, has developed two innovative products in the computational chemistry domain, MatchMaker™ and POEM™ (Pareto Optimal Embedding Model), both of which will be integrated into the RecursionOS. MatchMaker™ is a deep learning engine that leverages AI to predict the polypharmacology of small molecules for drug discovery. POEM™ is a similarity-based property prediction model that provides a more accurate and comprehensive measure of molecular similarity, setting it apart from other AI prediction models.

Naheed Kurji, CEO and Co-founder of Cyclica

Naheed Kurji, CEO and Co-Founder of Cyclica, stated that integrating Cyclica's proteome-wide prediction capabilities into Recursion's data ecosystem will result in one of the most extensive and purpose-built biological and chemical datasets in the drug discovery space.

Valence, a Montréal-based company located at Mila, the world's largest deep learning research institute, focuses on harnessing the power of deep learning for drug discovery. The firm has been a pioneer in applying low-data learning to drug design, enabling the development of differentiated small molecules with improved properties and functionality from datasets unsuitable for traditional deep learning methods.

Daniel Cohen, CEO and Co-founder of Valence Discovery

Daniel Cohen, CEO and Co-founder at Valence Discovery, expressed enthusiasm about integrating Valence's AI-based chemistry engine into Recursion's diverse and data-rich operating system, which he believes will help unlock the true potential of AI-first digital chemistry and drug discovery.

Upon acquisition, Valence will join forces with Recursion's Montréal deep learning research office, transforming into an artificial intelligence and machine learning research center led by Daniel Cohen, with continued advisory from Yoshua Bengio.

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Recursion will acquire Cyclica for $40 million and Valence for $47.5 million, with both acquisitions expected to be completed in the second quarter of 2023, subject to closing conditions. The purchase price will be payable in the form of shares of Recursion Class A common stock, shares of a subsidiary of Recursion exchangeable for shares of Recursion’s Class A common stock, and the assumption of certain outstanding Valence and Cyclica options.


Building drug discovery platforms

Recursion is a vivid example of a new generation of “digital biotechs” -- companies which are built around AI-driven highly integrated and data-centric R&D workflows, often presented in a form of research platforms. Such companies are strikingly different, business model-wise, from traditional drug discovery and biotech companies, often centered around a particular therapeutic asset in development.

Conceptually, the term "platform" signifies a holistic and interconnected system that amalgamates an array of tools, technologies, and algorithms, ultimately expediting and refining the drug development pipeline. Various components of a platform work in concert to process copious amounts of biological, chemical, and clinical data, driving innovation in the pharmaceutical sector. 

For instance, the Recursion Operating System (OS) offers a novel perspective on drug discovery by attempting to treat it as a search problem that can be methodically addressed. Central to the company's objectives, this integrated and multifaceted system is constructed to generate, analyze, and draw insights from large-scale biological and chemical datasets, with the aim of expediting the drug discovery process.

Three essential components form the backbone of the Recursion OS. Firstly, the Infrastructure Layer comprises both hardware and software, ensuring a stable foundation for the efficient operation of the system. Secondly, the Recursion Data Universe serves as a vast repository for diverse datasets, offering a wealth of information for researchers and data scientists to work with. Lastly, the Recursion Map is a collection of proprietary tools dedicated to discovery, design, and development in the drug discovery process.

Other AI in drug discovery companies building R&D platforms

There are a plethora of other AI drug discovery companies which operate sophisticated R&D platforms.

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Topics: Biotech Companies   

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