AstraZeneca (AZN.US) joins the “AI+ Pharmaceuticals” craze: $1.86 billion to join hands with Insitro to develop drugs for fatty liver disease and myocardial diseases

The Zhitong Finance App learned that AstraZeneca (AZN.US) announced that it has reached a cooperation with machine learning biotechnology company Insitro totaling up to 1.86 billion US dollars to help the British pharmaceutical company find new drugs for liver and heart diseases. AstraZeneca said on Thursday it will make a $40 million down payment. Insitro will combine its own data with AstraZeneca data to better understand the causes of fatty liver disease and myocardial disease. If this path works, the biotech company could receive up to $1.46 billion in additional payments, as well as a potential share of sales.

The deal is the pharmaceutical industry's latest bet — betting that AI can help quickly discover new drug targets. Insitro has previously announced R&D collaborations with LLY.US (LLY.US) and Bristol-Myers Squibb (BMY.US). Investors in the California biotech company include Anderson Horowitz (a16z), BlackRock, and Temasek.

Insitro uses its AI platform to simultaneously search clinical data and disease models. The goal is to form a new understanding of the underlying causes of the disease, thereby increasing the probability of successful treatment.

AstraZeneca's ambitions

“Choosing our new target was one of the hardest things we did,” said Sharon Barr (Sharon Barr), AstraZeneca's Executive Vice President and Head of Biopharmaceutical R&D, in an interview. “This is an opportunity for us to really dive deeper into these complex diseases and to provide a more accurate understanding of biology.”

AstraZeneca already has a number of heart medications and a number of ongoing research lines for metabolic diseases. However, the field has also recently experienced setbacks: earlier this year, a treatment called Wainua showed no curative effect in a myocardial disease; last year, the company also stopped developing a mid-term trial drug for the fatty liver disease MASH.

CEO Pascal Soriot (Pascal Soriot) is seeking expansion in the field of heart and metabolism, and is expected to eventually use a combination of some of these drugs.

Insitro's differentiation: “before you find your target”

“The vast majority of AI drug discovery companies are concerned about what happens after the target is identified,” Insitro CEO Daphne Koller (Daphne Koller) said in an interview.

Insitro, on the other hand, looked further ahead. “What the industry lacks the most is a deep understanding of disease biology and knowing where to intervene to really drive the situation,” she said.

She said that with this deal with AstraZeneca, Insitro's work on MASH is already quite advanced and is expected to produce drug targets faster; cardiovascular research may take longer.

The “AI+ medicine” boom

The time of this deal coincided with a week of intensive implementation of AI Pharmaceuticals BD (Business Development). Just one day before AstraZeneca's official announcement (October 13), Danish obesity drug research and development company Zealand Pharma announced a partnership with generative biology company Generate Biomedicines. The latter received $30 million in advance payments, up to $35 million in early preclinical milestone payments, and was eligible for a total of nearly $1.2 billion in milestone payments; on October 14, Vir Biotechnology and Gilead Sciences signed an agreement of up to $1.88 billion. Vir will use it The DaiSy artificial intelligence platform designs drug candidates — these two transactions alone combined to exceed $3 billion in two days.

Looking further, on September 24, Roche's Genetec and Earendil Labs reached a potential total cooperation of 1.5 billion US dollars; on October 2, Novartis and Abbott signed a license for an mRNA pipeline that relies heavily on AI design and sequence optimization, and the maximum potential total value of the transaction is about 7.775 billion US dollars.

China's power is also prominent in this wave: since 2026, the Hong Kong stock “first stock of AI pharmaceuticals,” Insili Smart has successively reached four collaborations with Schweier (US$888 million), Eli Lilly (US$2.75 billion, including US$115 million down payment), SK Biopharmaceuticals (US$2.5 billion), and Takeda (US$600 million), with a potential total potential value approaching US$7 billion; the total potential for long-term peptide cooperation between CSPC and AstraZeneca has reached a total potential total of US$18.5 billion and a down payment of US$1.2 billion. In the first half of the year, Insili Smart's revenue was approximately US$106 million, up 287.2% year over year, achieving full profit for the first time.

Tech giants are also moving upstream: Nvidia and Eli Lilly built a joint AI innovation lab, MSD and Google Cloud reached a $1 billion Agentic AI partnership, and Novo Nordisk joined hands with OpenAI and Anthropic. Last month, it was confirmed that Anthropic has built a “wet lab” (wet lab, laboratory for physical experiments) in the San Francisco Bay Area, extending AI ambitions to the field of pharmaceutical science.

These layouts fall on a heated racetrack. According to the industry report “AI Pharmaceuticals Entering the Asset Realization Era”, about 60 billion US dollars have been invested in AI drug discovery since 2019, and about 175 original AI research projects have entered human trials, but none have been approved for listing.

However, AI pharmaceutical companies' revenue currently relies heavily on cooperative down payments rather than milestone payments or sales shares — in this transaction, the $40 million down payment corresponds to up to $1.86 billion in total, accounting for only about 2%. The industry's focus is shifting from “model scoring” to “clinical verification and drug delivery capability”. The phase III study of Moderna and MSD's personalized mRNA cancer vaccine reached a double end, which is regarded as the first important verification of AI's deep participation in target design.