BioNTech is bolstering its artificial intelligence and machine learning capabilities through the £362 million acquisition of InstaDeep, a startup whose technology has already supported the company’s research in immunotherapy and Covid-19.
The acquisition sum announced Tuesday represents a combination of cash and BioNTech stock that will be used to acquire all outstanding shares of London-based InstaDeep, excluding the shares BioNTech already owns from a prior equity investment. InstaDeep shareholders could receive up to £200 million tied to performance milestones that were not disclosed.
InstaDeep was founded in Tunisia in 2014. Initially focused on web design, the company pivoted to AI in 2017. According to a Harvard Business School case study, the company’s co-founders realized AI could be used to solve century-long industrial problems, such as container packing or route optimization. By 2021, the company had two products: the printed circuit board routing system DeepPCB, and DeepChain, an AI-based protein design system for drug research.
The InstaDeep technologies leverage what’s called “reinforcement learning,” a type of machine learning that adapts quickly to new tasks by using what was learned from similar prior tasks. The company says reinforcement learning can be used to optimize strategies in a wide range of industries. Besides biotechnology, InstaDeep’s technology has found a place in industries such as logistics, electronics manufacturing, and financial services.
BioNTech and InstaDeep started working together in 2019. The following year, the two companies inked a multi-year alliance focused on applying the startup’s technology toward the development of immunotherapies for cancer and infectious diseases. The collaboration led to the formation of a joint AI innovation lab with sites in London and Mainz, Germany, where BioNTech is based.
One of the fruits of the alliance is an early warning system to detect new and potentially high-risk SARS-CoV-2 variants. The system works by analyzing available sequencing data from around the world. According to BioNTech, this technology is able to evaluate new variants in minutes. In results from an 11-month study that were initially reported last January, BioNTech said the warning system was able to distinguish 12 of 13 World Health Organization-designated variants, identifying them an average of two months before those variants received their official designations. Weeks after that announcement, InstaDeep closed its $100 million Series B round of financing. BioNTech was one of the investors.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
[The following two paragraphs updated with CEO comment.] Speaking Tuesday during the J.P. Morgan Healthcare Conference in San Francisco, BioNTech co-founder and CEO Ugur Sahin said the Covid-19 early warning system was one of several company projects from the last three years that show the importance of integrating AI with the existing business. AI also reduces the turnaround time for developing mRNA vaccines, he added. BioNTech sees InstaDeep’s capabilities expanding the German company’s AI-based drug research efforts, enabling high-throughput design and testing of new drug candidates at scale. Furthermore, BioNTech said it plans to develop new AI and ML technologies.
“Our goal is, with the acquisition, to integrate AI seamlessly in all aspects of our work, from the target discovery, lead discovery, as well as the manufacturing and delivery of our products,” Sahin said.
When the acquisition closes, InstaDeep will continue as a London-based subsidiary of BioNTech. The German company said it will retain InstaDeep’s 240 employees, who will support BioNTech’s projects and continue to work with InstaDeep’s clients in other industries.
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