Novo Nordisk is buying into the promise of artificial intelligence, partnering with computational drug discovery company Valo Health in a deal that brings three preclinical programs now and potentially more drug candidates later.
The agreement announced Monday calls for the Danish drugs giant to pay Valo $60 million, consisting of an upfront payment and a potential near-term payment tied to a milestone that was not disclosed. The alliance could bring Novo Nordisk up to 11 total programs for cardiometabolic disorders. Depending on the progress of those programs. Valo could earn up to $2.7 billion in milestone payments plus R&D funding for the programs, which will be discovered and developed by applying artificial intelligence to the company’s large trove of human data. Valo will also be eligible for royalties from sales of any products commercialized from the alliance.
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Boston-based Valo discovers drugs with Opal, a computational technology platform that identifies and validates novel druggable targets as well as molecules that are capable of addressing these targets. In addition, Opal runs simulations that result in predictions about a compound’s safety and efficacy. The three cardiovascular diseases programs coming to Novo Nordisk were developed with Opal. The targets of those programs were not disclosed.
In its announcement of the alliance, Novo Nordisk said access to Opal complements technologies it already has. The companies said they plan to work together to derive novel insights from human genetic data and longitudinal patient data in cardiovascular disease.
“Artificial Intelligence and machine learning hold the promise to positively impact drug discovery and development, in particular enabling our vision of leveraging human datasets early in the process, which should lead to a better understanding of target biology,” Marcus Schindler, executive vice president and chief scientific officer of Novo Nordisk, said in a prepared statement. “Valo brings a differentiated and powerful approach to using these technologies on real-world human data to generate new insights and translate them into potential therapeutics for the benefit of patients suffering from cardiometabolic conditions. I am very much looking forward to our collaboration.”
The diabetes focus of Novo Nordisk’s drug portfolio has is expanded to encompass weight loss, an indication addressed by semaglutide, part of a class of GLP-1 agonist drugs. Though these drugs were initially approved for treating diabetes, demand is growing for these products for weight loss. Novo Nordisk has stated it aims to diversity its portfolio by expanding to other cardiometabolic disorders. Nearly a year ago, the company agreed to pay $70 million up front for rights to a Ventus Pharmaceuticals small molecule that targets a protein called NLRP3 with potential applications in several cardiometabolic disorders. The pharma giant has continued to be an active dealmaker, reaching acquisition agreements last month for two privately held biotechs, Inversago Pharma and Embark Biotech. Each company brings different approaches to cardiometabolic disorders.
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Valo Health was formed in 2020 by Flagship Pioneering, an investment firm and startup creator. Since its inception, Valo had raised more than $100 million in financing for its AI-driven drug discovery research. In 2021, Valo entered into a deal that would make it a public company via a SPAC merger. At the time, the company said its pipeline spanned 17 programs in therapeutic areas such as cardiovascular/metabolic/renal disorders, cancer, and neurodegenerative disease. Going public would help finance plans for clinical development of its internally discovered drug candidates, the company said. But the merger was later terminated in what Valo and its SPAC acquirer described as a mutual decision.
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