Exscientia PLC shares climbed as much as 30% in pre-market trading on Wednesday after the precision-medicine company announced a new, multi-year collaboration with German science and technology company Merck KGaA, which could be worth hundreds of millions of dollars.
The collaboration will involve using Exscientia’s AI-driven precision drug design and discovery capabilities to discover novel small-molecule drug candidates across oncology, neuroinflammation and immunology, according to the company.
"We’re pleased that Merck KGaA, Darmstadt, Germany chose our team of experts for this AI-led drug discovery collaboration," Exscientia CEO Andrew Hopkins said in a statement.
"We look forward to complementing their outstanding scientific acumen with our integrated technology platform and ability to generate novel data in order to address some of the hardest drug design challenges in cancer and immunology," he added.
Exscientia said it will receive a $20 million upfront payment from Merck, which is expected to be reflected in the company’s second half 2023 results, and will be eligible for up to $674 million in milestone payments, along with royalties on product sales.
The company noted that it is eligible to receive up to $113 million of potential milestone payments in the discovery phase.
Shares of Exscientia have fallen 10% year to date.
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