German pharmaceutical company Bayer and US-based TechBio firm Recursion Pharmaceuticals have updated their research collaboration to focus on precision oncology.

The partnership will combine Recursion’s artificial intelligence (AI)-guided drug discovery platform with Bayer’s small molecule compound library and skills in biology and medicinal chemistry.

The change in focus will allow the German firm to use Recursion’s capabilities to start and progress the identification of new therapeutic targets for complex cancer indications with unmet needs.

Under the terms of the agreement, the firms may launch up to seven cancer programmes and Recursion is entitled to potential future payments of up to $1.5bn, plus royalties on net sales, contingent on success.

In addition, Bayer will gain the exclusive right to license new therapies that come from the research activities.

Bayer pharmaceuticals division executive committee member Juergen Eckhardt said: “The methodology in which Recursion uses artificial intelligence (AI) in drug discovery, could be one of the most disruptive technologies of our time.

“As our collaboration and the usage of AI continue to evolve, we look forward to continuing to work with industry innovators to identify novel targets for oncology indications.”

Bayer’s oncology strategy is based on precision drug development which allows fast identification of the targets and commercially viable projects.

Recursion’s drug discovery platform integrates scaled wet-lab biology and chemistry data with computational tools using advanced machine learning technologies.

Recursion, which secured $50m from Chip designer Nvidia in July this year, intends to industrialise drug discovery by validating and advancing therapeutic programmes effectively.

Recursion Pharmaceuticals co-founder and CEO Chris Gibson said: “We believe that the next generation of biopharma leaders will operate at the convergence of rigorous science, scaled datasets and accelerated computing.

“Today, we are thrilled to announce the evolution of our collaboration with Bayer, highlighting the flexibility and broad-scale applicability of our platform, as we turn our focus together on challenging targets in oncology with the goal of bringing better medicines to patients more efficiently.”