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Computational Drug Discovery Company Acquires A.I. Businesses

Synthetic biology

(Gerd Altmann, Pixabay)

8 May 2023. Two companies using artificial intelligence to advance biotechnology and design new therapies are merging with a computational-engineering drug discovery enterprise. Recursion in Salt Lake City, Utah is acquiring Cyclica in Toronto, Ontario and Valence Discovery in Montreal, Quebec for a total of $87.5 million in share exchange and option assumption deals.

Recursion discovers new treatments with a combination of data and biological science. The company says its process, called the Recursion Operating System, is based on large-scale data sets in chemistry and biology using advanced analytics and algorithms derived from data science and engineering to conduct massive parallel screenings with its own supercomputer. Those so-called dry lab tools, says Recursion, are combined with cell lines and cultures, to discover new drugs with robotics, computational biology, and automation that can conduct up to 2.2 million experiments each week. The company says this approach makes possible computational routines beyond the scale and complexity of human intelligence, as well as removing implicit biases toward favored solutions.

The company’s pipeline has three rare disease targets and two types of cancer in clinical trials, with four other cancer programs in late discovery or preclinical stages. In May 2018, Science & Enterprise reported on a grant from the Bill and Melinda Gates Foundation to Recursion and a lab at University of California in San Diego for discovering new drugs to treat malaria.

3-D AlphaFold protein sequences

Cyclica is an eight year-old business using artificial intelligence and protein chemistry to discover and design new drugs. The company says its algorithms based on genomics, chemistry, and physics simultaneously test for interactions with target molecules, but also seek off-target effects, to reveal much earlier adverse reactions and chemical activity properties in the body. Cyclica says its models include three-dimensional AlphaFold protein sequences generated by Alphabet’s DeepMind A.I. project. Science & Enterprise last reported on Cyclica in Mar. 2020 when the company formed a joint venture to advance treatments that work like cannabinoids from cannabis plants, for mental health and neuropsychiatric disorders.

Valence Discovery, founded in 2018 and began public operations in 2021, is spun-off from labs and resides at Mila, a research collaboration of universities in Quebec province that studies deep learning in health and environment as well as A.I. ethics. Valence is developing processes for drug discovery and design that make possible the use of algorithms where data sets are small and noisy, improve the functionality of graphic neural networks, and apply generative models to molecular design and medicinal chemistry.

Recursion is acquiring Cyclica for $40 million and Valence Discovery for 47.5 million, payable to those companies’ shareholders in Recursion common stock, and assumption of Cyclica/Valence outstanding options. Valence is expected to join Recursion’s current branch in Montreal. The new combined company, says Recursion, is on track to accelerate the transition to A.I.-first drug discovery in the biotechnology industry.

“The strategic acquisitions of Cyclica and Valence,” says Recursion co-founder and CEO Chris Gibson in a company statement, “add industry-leading capabilities in digital chemistry, as well as machine learning and artificial intelligence, which combined with our large-scale automated wet laboratories and supercomputing capabilities, enables us to deploy what I believe is the most complete, technology-enabled drug discovery solution in the biopharma industry.”

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