Shares of Shenzhen-based AI-powered drug researcher XTalPi jumped as much as 23 per cent after it signed a US$6 billion deal with a firm founded by a Harvard University chemist with a reputation as a serial biotech entrepreneur.
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DoveTree, established by professor Gregory Verdine, signed a definitive collaboration agreement in late June with XTalPi, the Chinese company said in a filing with Hong Kong’s bourse on Tuesday. Harvard describes Verdine as a “pioneer in chemical biology and a distinguished serial entrepreneur”.
DoveTree agreed to pay XTalPi US$100 million within 180 days of the signing for the exclusive worldwide rights to develop and commercialise drug candidates discovered by XTalPi, of which US$51 million has been paid.
“[XTalPi] will use its end-to-end AI drug discovery platform through integrated ‘AI + robotics’ technology to discover and develop small-molecule and antibody-based drug candidates for multiple targets selected by DoveTree, primarily in the fields of oncology, immunologic and inflammatory diseases, neurological disorders and metabolic dysregulation,” XTalPi said.
The company will be entitled to payments of up to US$5.89 billion if the candidates meet regulatory and commercial milestones, in addition to royalties based on a single-digit percentage of annual net sales.
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XTalPi’s shares ended the morning session on Wednesday up 8.5 per cent to a five-month high of HK$7.16.
The company’s self-developed large language model (LLM) has helped increase the success rate of chemical experiments to 90 per cent from 20 to 30 per cent, Zhang Peiyu, chief scientific officer of the firm, said in January. LLMs underpin generative artificial-intelligence services like ChatGPT.