Sanjiv Patel, Relay CEO

In one of their first ever ac­qui­si­tions, Re­lay bets $85M cash on a new AI-based screen­ing ap­proach

Al­though they’ve nev­er been short for cash, Re­lay Ther­a­peu­tics hasn’t been one for ac­qui­si­tions in its 5-year his­to­ry, fo­cus­ing in­stead on de­vel­op­ing its own tools to study how pro­teins move and ad­vanc­ing mol­e­cules off those in­sights.

On Fri­day, though, the Third Rock-spun biotech plunked down $85 mil­lion in cash and an­oth­er $185 mil­lion in mile­stones to ac­quire the small, two-year-old, Google-part­nered ma­chine learn­ing com­pa­ny Ze­bi­AI. The deal will al­low Re­lay to add a crit­i­cal new tech­nol­o­gy to its ear­ly-stage dis­cov­ery tools now that, with three can­di­dates in the clin­ic, they’ve shown those tools can pay off, said CEO San­jiv Pa­tel.

“It makes the whole dis­cov­ery process much more ef­fi­cient and ef­fec­tive,” Pa­tel told End­points News of Ze­bi­AI’s plat­form.

Ze­bi­AI is one of a se­ries of biotechs that have sprout­ed up over the last few years promis­ing to dis­cov­er drugs faster with a new tech­nol­o­gy called DNA-en­cod­ed li­brary screens. By at­tach­ing dif­fer­ent DNA strands to mil­lions or bil­lions of mol­e­cules, they can blast those mol­e­cules at a par­tic­u­lar pro­tein tar­get and, with DNA se­quenc­ing, fig­ure out which mol­e­cules hit and which didn’t.

Pa­tel said that Ze­bi­AI stood out to him from the oth­er com­pa­nies in the space af­ter he read a pa­per they pub­lished in the Jour­nal of Med­i­c­i­nal Chem­istry last sum­mer. For one, they had ac­tu­al­ly shown in a pres­ti­gious jour­nal their tech­nol­o­gy could pay off. But they had al­so tak­en a slight­ly dif­fer­ent tack than their ri­vals.

Richard Wag­n­er

Found­ed by Richard Wag­n­er, who al­so built the well-part­nered biotech X-Chem, Ze­bi­AI tried to solve some of the prob­lems raised by DNA en­cod­ed li­braries: Plen­ty of mol­e­cules will hit a giv­en tar­get but many may not be re­mote­ly suit­able as drugs; you need to fig­ure out which to pur­sue. Ze­bi­AI de­vel­oped a ma­chine learn­ing mod­el to pre­dict which mol­e­cules those would be. They al­so re­lied on com­mer­cial li­braries of mol­e­cules that al­ready have drug-like prop­er­ties, weed­ing out ill-fit­ting mol­e­cules from the start.

“The goal is to get to chem­i­cal start­ing points that look like drugs much more rapid­ly,” Pa­tel said. “And you on­ly syn­the­size some­thing in the wet lab when you get very close to es­sen­tial­ly what could be a drug-like mol­e­cule.”

Re­lay will in­cor­po­rate the Ze­bi­AI tech in­to a plat­form that has at­tract­ed con­sid­er­able buzz — and con­sid­er­able cash — over the last half-decade and will see its first hu­man da­ta lat­er this year. Found­ed on Bran­deis Uni­ver­si­ty bio­chemist Dorothee Kern’s idea that you could find bet­ter drugs by us­ing new tech­nol­o­gy to “look” at pro­teins in mo­tion rather than as sta­t­ic ob­jects, they’ve now brought three can­cer drugs in­to the clin­ic and have an undis­closed pipeline of mol­e­cules for ge­net­ic dis­eases on the way.

Re­lay will prin­ci­pal­ly use the screens to hunt for mol­e­cules that can hit the hand­ful of pro­teins they’re al­ready been work­ing on. But, through a pre-ex­ist­ing ini­tia­tive from Ze­bi­AI, aca­d­e­m­ic labs — which are of­ten in sore need of chem­i­cal mat­ter — will con­tin­ue to use the plat­form to screen for mol­e­cules against new tar­gets.

Re­lay may look to li­cense or part­ner on pro­grams that come out of the ini­tia­tive.

“It’s great for us,” Pa­tel said. “Be­cause it al­lows us to cre­ate these ma­chine learn­ing da­ta sets on these nov­el pro­teins, but it al­so gives ac­cess to new drug dis­cov­ery pro­grams in com­plete­ly new ar­eas of bi­ol­o­gy.”

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Scott Struthers, Crinetics CEO

Cri­net­ics spins out ra­dio­phar­ma ef­forts in­to a new com­pa­ny, high­light­ing the grow­ing field­'s al­lure

Largely known for its nonpeptide small molecule research, Crinetics has been keeping its radiopharma work comparatively under wraps. But that changed Monday afternoon as the California biotech spun out a new company focused solely on the burgeoning field.

Crinetics launched Radionetics after the closing bell Monday, the company announced, seeding the new entity with $30 million raised from 5AM Ventures and Frazier Healthcare Partners. Radionetics will start with its own radiopharma-centric platform and a pipeline of 10 programs aimed at solid tumors.

Jeffrey Nau, Oyster Point Pharma CEO

FDA OKs an in­haled ver­sion of smok­ing ces­sa­tion drug Chan­tix — for a com­mon eye dis­ease

Oyster Point Pharma now has its first FDA-approved product — Tyrvaya. And the biotech has taken a unique route to get there by using an old drug with a storied past.

The New Jersey biotech announced this morning that the FDA has approved their nasal spray product for dry eye disease on Friday — the first nasal spray to be approved for the disease. The product’s active ingredient is 0.03 mg of varenicline, also known as smoking cessation aid Chantix.