Lilly signs another AI deal, this one for obesity

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Eli Lilly and Co. (IBJ photo)

In its latest push into artificial intelligence, Eli Lilly and Co. has signed a deal with a California-based biotech to discover new obesity targets in humans.

Fauna Bio, based in the San Francisco area, said Thursday it will give Lilly access to its AI platform, called Convergence, to support preclinical drug discovery efforts in obesity.

Under the terms of the deal, 5-year-old Fauna Bio will receive an unspecified upfront payment, including equity investment, and is eligible to receive up to $494 million in pre-clinical, clinical and commercial milestone payments, as well as royalties on product sales.

The Indianapolis-based drugmaker this month launched an obesity drug called Zepbound, which analysts predict could ring up annual sales in the tens of billions of dollars. The drug, also known by its generic name, tirzepatide, contains the same active ingredient as another Lilly drug for type 2 diabetes called Mounjaro, which has quickly become a blockbuster, with sales of nearly $3 billion through Sept. 30.

“Lilly is a leader in obesity treatment, and our approach enables and accelerates discovery across different disease areas and modalities for our partners, who bring deep expertise in drug development,” Ashley Zehnder, CEO and co-founder of Fauna Bio, said in written remarks.

Fauna said its AI platform analyzes data collected from the “protective adaptations of hibernation biology” to identify drug targets for humans.

The platform uses genomic analyses across 452 mammal species, including 65 hibernators. Its database includes over 22 distinct tissue types collected at 13 unique and highly precise physiological time-points from the 13-lined ground squirrel, as well as tissue samples from tenrecs and spiny mice.

In total, Fauna has collected more than 22 billion sequence reads, the company said.

Lilly said it was eager to find more approaches for treating obesity.

“Fauna Bio brings a unique approach to the discovery of novel targets for obesity,” Ruth Gimeno, Lilly group vice president for diabetes, obesity and cardiometabolic research, said in written remarks. “We look forward to working with the Fauna Bio team to realize the value of their platform and discover more effective treatments for patients with obesity.”

Like many drugmakers, Lilly is moving aggressively into artificial intelligence to discover and develop new treatments for diseases. In 2019, it signed a partnership worth up to $550 million with a San Francisco-based biotech called Atomwise for preclinical drug discovery efforts on up to 10 drug targets.

In 2021, Lilly signed a deal with Verge Genomics, an AI company based in San Francisco, in a deal worth up to $694 million to identify and validate high-potential drug targets for amyotrophic lateral sclerosis, a progressive motor neuron disease better known as Lou Gehrig’s disease.

And this May, XtalPi Inc., a biotech that boasts it is “powered by artificial intelligence and automation,” based in Cambridge, Massachusetts, announced an AI drug discovery collaboration with Lilly that could be worth up to $250 million in upfront and milestone payments. The collaboration will use XtalPi’s AI capabilities and robotics platform to design and deliver drug candidates for an undisclosed target, the announcement said.

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