BioNTech has agreed to buy UK artificial intelligence start-up InstaDeep for up to £562mn in its biggest ever deal, as the German company expands beyond the Covid-19 vaccine that transformed its fortunes.
The biotech company is trying to harness machine learning to improve the drug discovery process, including developing personalised treatments tailored to a patient’s cancer.
The deal follows a multiyear collaboration with London-based InstaDeep that created an early warning system to predict future variants of the Sars CoV-2 virus. BioNTech invested in a £100mn fundraising round by InstaDeep last year.
Uğur Şahin, BioNTech’s chief executive, said the German pharma group had been focused on using “computational solutions” to create personalised drugs that harness the power of the immune system, known as immunotherapies, since its inception.
“The acquisition of InstaDeep allows us to incorporate the rapidly evolving AI capabilities of the digital world into our technologies, research, drug discovery, manufacturing, and deployment processes,” he said. “Our aim is to make BioNTech a technology company where AI is seamlessly integrated into all aspects of our work.”
Pharmaceutical companies are increasingly interested in how artificial intelligence can accelerate the laborious and costly process of discovering new drugs. Sanofi and Bristol Myers Squibb are among those that have struck partnerships with AI-focused start-ups but an acquisition is unusual.
BioNTech is reinvesting most of the proceeds from its bestselling Covid-19 jab, developed with Pfizer, to pursue its original mission of transforming how cancer is treated. Until now, its acquisitions have been small bolt-on deals of under €100mn. At the end of the third quarter, BioNTech had €13.4bn in cash and cash equivalents.
The German drugmaker will pay about £362mn in cash and shares to acquire the remaining InstaDeep shares. InstaDeep shareholders will be entitled to performance-based milestone payments worth up to £200mn.
InstaDeep was founded in 2014 to create artificial intelligence products for businesses. While headquartered in London, it has offices in Paris, Tunis, Lagos, Dubai, and Cape Town and employs 240 people.
The AI company has already helped BioNTech improve its algorithm to select which parts of a tumour to target to create the most effective therapy. Karim Beguir, chief executive and co-founder of InstaDeep, said it shared the same “culture of deep tech innovation and focus on positive human impact” as BioNTech.
“Together, we envision building a world leader that combines biopharmaceutical research and AI with the aim to design next-generation immunotherapies that enhance medical care — thus, helping fight cancer and other diseases,” he said.
The deal comes a week after BioNTech signed an agreement with the UK government, pledging to enrol up to 10,000 patients in clinical trials for so-called cancer vaccines, which try to teach a patient’s immune system how to tackle tumours.