Merck KGaA has become the latest Big Pharma to tap the drug discovery expertise of Flagship Pioneering’s Valo Health. The German drugmaker has inked a deal to harness Valo’s reams of human biology data to find new therapeutic targets for Parkinson’s disease, offering a potential payout eclipsing $3 billion in return.
Merck and Valo will use the latter’s discovery platform to quickly craft preclinical candidates for newly identified targets, Valo announced in a Nov. 20 release. On top of the upfront and potential milestone payments totaling up to more than $3 billion, Valo will also receive R&D funding and potential royalties on any resulting product sales.
“Our research engine is focused on delivering meaningful medicines for patients with high unmet medical needs,” Amy Kao, M.D., the global head of Merck KGaA’s neurology and immunology research unit, said in the release. “Valo Health’s AI-enabled platforms utilizing human data will help sharpen target selection and streamline drug discovery, enabling us to advance the most promising candidates faster.”
Valo’s cache of human data has enabled the company to pin down distinct populations of patients with neurological diseases, the biotech said in the release, which will allow the partners to suss out targets for the greatest areas of unmet need.
Partnerships have become increasingly important for Valo as its own internal pipeline has stumbled. In January, the biotech scrapped a diabetic retinopathy candidate after the ROCK inhibitor failed a phase 2 trial. At the time, Valo said its focus would shift toward finding new targets in its trove of real-world data.
Valo wasted no time executing on this new strategy, inking deals with Novo Nordisk and Pfizer to find new targets for obesity and autoimmune diseases, respectively. Novo committed up to $190 million upfront to extend a partnership that originally launched in 2023, while Valo’s Pfizer collaboration came as the sixth entry of the Big Pharma’s 10-program agreement with Flagship.
The biotech’s internal pipeline currently includes five preclinical candidates, four spanning cardiovascular indications and one in oncology, according to a company slideshow viewed by Fierce Biotech.
Massachusetts-based Valo also has a standing relationship with global CRO Charles River Laboratories. The two companies teamed up to craft the drug discovery platform powering the Pfizer pact, which has also been adopted by Lundbeck to find new neuroscience treatments. And, in March, Valo and Charles River announced they’d used that same platform to develop a preclinical lupus asset, alongside Flagship’s Pioneering Medicines.