Eli Lilly and Novartis, two of the biggest names in pharmaceuticals, have formed strategic alliances with Isomorphic Labs to use AI to find novel drugs for treating illnesses.

The total estimated value of the transactions is $3 billion. Eli Lilly has agreed to pay Isomorphic, the London-based spin-out of Google AI R&D group DeepMind, $45 million up front and maybe up to $1.7 billion based on performance targets, minus royalties. On the other hand, Novartis has agreed to pay $37.5 million up front, as well as "select" research expenses and up to $1.2 billion (again, exclusive of royalties) in performance-based incentives over time.

Demis Hassabis, the CEO of Isomorphic and co-founder of DeepMind, expressed his excitement in a news statement about the relationship and the use of their in-house technological platform. He said that what made their collaboration so fascinating was their shared commitment to developing novel drug design strategies and their respect for cutting-edge technology.

Under DeepMind parent company Alphabet, Hassabis introduced Isomorphic in 2021. It utilizes DeepMind's AlphaFold 2 AI technology, which may be used to predict the structure of proteins in the human body. The goal of identifying these structures is to help researchers find new target paths for drug delivery in the fight against illness.

Technology isn't flawless. According to a new paper published in the journal Nature, AlphaFold frequently makes glaring errors and is often more suited as a “hypothesis generator” than as a substitute for experimental evidence. However, the model's ability to produce somewhat accurate protein predictions at a larger scale surpasses that of the majority of previous approaches.