Eli Lilly doubles down on AI-generated drug discovery

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Eli Lilly made a $2.75 billion deal with Hong Kong-based Insilico Medicine, a startup that uses AI to accelerate drug discovery. Under the terms: Insilico will receive $115 million up front and can earn the full value of the deal if the drugs it produces and Lilly licenses reach certain regulatory and sales milestones, as well as through royalties. Lilly gets the exclusive rights to sell an Insilico-developed GLP-1 drug for diabetes, per the Financial Times. It’s not just about GLP-1s. Lilly’s weight loss and diabetes injectables helped it become the first drugmaker to reach a $1 trillion valuation late last year. But to find its next success cycle, it’s turning to AI investments. The next major breakthrough may be in China The country’s significant investments in research and the comparatively low cost of running trials there are making it attractive for drug discovery targets. Chen Yu, the founder of biotech investment firm TCGX, told CNBC that through licensing, American drug companies can “get clinical proof of concept” of a drug in China and then bring it to the US “for the expensive clinical development when we actually know the drug works.” However, if American lawmakers take umbrage at large drugmakers paying China for assets rather than acquiring US drug startups, legislation or an executive order could shut down this avenue.