Verge Genomics and Eli Lilly announced Thursday a three-year agreement to collaborate on developing new drugs for ALS. The $25 million investment provides San Francisco-based Verge Genomics with a potential $694 million additional, plus royalties after certain milestones have been met. Alice Zhang, Verge CEO, cofounder, and cofounder, says, “This is a good model.
Zhang founded Verge in 2015. He quickly built a company that caught the attention of prominent genetics researchers and investors alike. Zhang was included on the Forbes 30 Under 30 Science, and Verge made it onto the Forbes AI 50 lists in 2017. The company has raised $54million to date. According to Pitchbook, its most recent valuation is $60million (the company declined an update valuation).
Zhang maintains that her company stands out despite the increase in AI-based drug development companies, including Insitro Pharmaceuticals (which have more funding than Verge) and Recursion Pharmaceuticals (which have less). Zhang says, “Our biggest difference is that we use human data direct from the source. We’re using human brains as input for our AI.” Others, however, often resort to animal testing or laboratory-engineered disease models. Verge is also able to develop its drugs. Zhang said, “We sell drugs, and not algorithms and data.”
Verge is the only drug company that targets neurological diseases such as Parkinson’s disease, Alzheimer’s disease, and ALS. Complex biological interactions cause these diseases. Verge seeks drugs that can target one “master genes” that can influence hundreds of genes at once. This breadth attracted Lilly’s attention and led the pharmaceutical company to contact Verge about a potential partnership. Zhang said that Lilly was interested in the capabilities of our platform and our focus on neuroscience.
It is a rare progressive neurodegenerative condition (also known as Lou Gehrig’s disease, named for a New York Yankees first baseman diagnosed with ALS at age 37). Verge will make use of its AI platform to discover new treatments for ALS. Lilly can then choose up to four of the drugs for further clinical research. Verge already has three ALS drugs in preclinical development, but these are not included with the Lilly agreement.
Zhang hopes that this deal will demonstrate to the biopharma industry how companies that use AI for drug discovery are not a fad. Zhang stated that there was once a question about whether companies like hers were hype or hope a few years ago. Now, Zhang believes that big pharma companies recognize the necessity of AI for drug discovery. “It’s not just a trend,” Zhang said.