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Pfizer backs Israel’s CytoReason, inks new research deal for AI drug development

US pharmaceutical giant to make $20m equity investment, part of larger agreement to license tech and collaborate on R&D

Ricky Ben-David is The Times of Israel’s Tech Israel editor and reporter.

A woman walks in front of Pfizer's headquarters in Manhattan, November 2020. (Massimo Giachetti via iStock by Getty Images)
A woman walks in front of Pfizer's headquarters in Manhattan, November 2020. (Massimo Giachetti via iStock by Getty Images)

Pharmaceutical giant Pfizer is making a $20 million investment in Israeli firm CytoReason, a developer of computational disease models for drug discovery and development, as part of a wider deal worth up to $110 million over the next five years, the companies announced on Tuesday.

The deal builds on an existing, multi-year cooperation agreement dating back to 2019 that allows Pfizer to use CytoReason’s digital models of the human immune system and diseases in its pursuit of developing innovative drugs.

Under the terms of the renewed partnership deal, Pfizer will make an equity investment of $20 million, have options to license CytoReason’s platform and disease models in a multi-year commercial deal worth $90 million, and fund additional research projects, bringing the value of the total transaction to $110 million by 2027.

CytoReason says its technologies have provided Pfizer with insights into a number of R&D programs across over 20 diseases including autoimmune disorders such as lupus and inflammatory bowel disease (IBD). IBD is a lifelong, chronic disease that affects the digestive system, and includes Crohn’s disease and ulcerative colitis.

The new research agreement will support the development of additional disease models in new therapeutic areas, the parties said.

“Pfizer has been a strategic partner of CytoReason since 2019, and we are thrilled to scale our collaboration as one of Pfizer’s trusted AI partners for accelerating drug development,” said CytoReason co-founder and CEO David Harel in a company statement.

CytoReason co-founders from right to left: David Harel, CEO, Professor Shai Shen-Orr, chief scientist, Elina Starosvetsky, VP biology, and Renaud Gaujoux, principal scientist and data science architect. (Fabian Koldorff)

The partnership will advance “a significant shift in the biotech industry” and help “drive future R&D for pharmaceutical companies as they continue to use machine learning to develop treatments more efficiently,” said Harel.

Founded in 2016, CytoReason developed computational technology that serves as a GPS-like mechanism that navigates the immune system. The machine-learning software collects and combines data from a variety of sources, including in-house data and published research on the immune system and other clinical studies, to discover insights into the biology of diseases.

The technology then builds a digital, computational simulator of the human body that can be used to predict responses to drugs, thus providing direction as to which ones can best benefit patients.

Essentially, CytoReason allows pharmaceutical companies “to develop their drugs on our platform using AI to simulate the response rather than wait for animal trials and then clinical trials,” Harel told The Times of Israel last year. “This also helps to reduce costs.”

Costs, and time, are huge factors in drug discovery and development. On average, it takes billions of dollars and almost a decade to develop new medications, because of the lengthy trials and lab work involved in the process. According to a 2016 study that examined the average R&D amounts for developing new drugs, the costs were found to be between $1.4 billion and $2.8 billion after market approval.

Mikael Dolsten, Pfizer’s chief scientific officer and president of worldwide research, said the company was looking forward to continuing its work with CytoReason’s team of some 80 biologists, bioinformaticians and data engineers, and to “leveraging its cutting-edge platform.”

This May 2022 photo provided by Pfizer shows production of the Pfizer’s COVID-19 vaccine for children under 5 in Puurs, Belgium. (Pfizer via AP)

“CytoReason’s biological data allows us to gain deeper insight into the best drug development pathways for patients, resulting in more informed decisions that are timely and cost-effective,” said Dolsten.

CytoReason has also been working with other leading global pharmaceutical companies including French drugmaker Sanofi, Swiss pharma firms Ferring and Roche, and the UK’s GSK.

The Israeli company’s work with Sanofi has focused on developing a new treatment for asthma patients, and its collaboration with Ferring is centered around new treatments for patients with IBD.

CytoReason is headquartered in Tel Aviv and employs about 80 people across Israel, the US, and Europe. Its technology was initially developed at the Technion – Israel Institute of Technology.

To date, the company has raised about $20 million in private capital from investors such as PICO Venture Partners and OurCrowd, according to the Start-Up Nation Finder database.

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