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AI Drug Discovery Company Acquired in $270M Deal

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(Mohamed Hassan, Pixabay. https://pixabay.com/photos/paper-business-finance-document-3213924/)

16 Apr. 2021. A biotechnology company using protein dynamics to develop precision cancer therapies is acquiring a drug discovery company based on machine learning algorithms. Relay Therapeutics in Cambridge, Massachusetts is buying ZebAI Therapeutics in Waltham, Mass. in a deal that could bring ZebAI shareholders as much as $270 million if all terms of the agreement are fulfilled.

ZebAI applies machine learning, a form of artificial intelligence, to discover new small-molecule or low molecular weight drugs. The company’s algorithms explore interactions between proteins in the body and large-scale libraries of small molecule chemical entities found in commercial and other available databases, including experimental data. Those interactions train the company’s algorithms for discovering new drugs, as described in a paper published in Journal of Medicinal Chemistry in June 2020. In the paper, a team from ZebAI analyzed some 2,000 molecules in DNA-encoded molecular libraries against three protein targets, returning a 29 percent hit rate, and finding potent inhibitors for each of the three proteins.

Earlier in 2020, ZebAI began a collaboration with Google Accelerated Science that applies artificial intelligence to research, for improving discovery of small molecule drug candidates with machine learning. Their initiative called Chemistry of the Genome or Chemome, engages academic researchers to follow-up on new protein/small molecule discoveries and provide a better understanding of those chemical interactions for therapies.

Relay Therapeutics discovers therapies for diseases considered difficult to treat, using methods based on protein movement and dynamics. Most conventional research, says the company, treats proteins as static entities, but Relay’s technology, called Dynamo, discovers drugs by analyzing the dynamics of proteins, which combines the structure of protein molecules, with chemistry, biophysics, and computational techniques.

Applies technology to precision cancer therapies

The company applies the Dynamo technology to precision cancer treatments addressing specific molecular targets, rather than cancers found in specific organs or tissue. One of its lead candidates, code-named RLY-1971, binds to and stabilizes SHP2 proteins that drive proliferation of cancer cells and support resistance to targeted therapies. Relay believes RLY-1971 can block the route some cancers use to avoid other cancer treatments, thus overcome resistance by some cancers to therapy.

Another Relay therapy candidate in an early-stage clinical trial is code-named RLY-4008, designed to limit the protein fibroblast growth factor receptor 2, or FGFR2. The FGFR2 protein plays a key role in bone growth, but is also implicated in several solid tumor cancers. Relay says in preclinical studies, RLY-4008 shows promise in cancer of bile ducts, and the company is testing the drug in clinical trials against specific molecular targets, while not affecting other fibroblast growth factor receptor proteins.

“The combination of ZebiAI’s approach with our Dynamo platform,” says Relay Therapeutics president Sanjiv Patel in a company statement, “has the potential to predict more drug-like chemical starting points, reduce cycle time to compound optimization, and ultimately, increase the number and range of programs that can be developed in parallel.”

The acquisition agreement calls for Relay Therapeutics to pay ZebAI shareholders $20 million in cash and $65 million in Relay common stock. ZebAI shareholders are also eligible for another $85 million for achieving certain platform and program milestones, payable as well in Relay stock. In addition, if Relay Therapeutics makes any collaboration deals for work involving ZebAI’s technology in the next three years, ZebAI shareholders will receive in cash 10 percent of the proceeds from those agreements up to $100 million.

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