AstraZeneca (AZN) claimed to be the first pharmaceutical company to buy an AI firm today after it snapped up Boston-based Modella AI to speed up the discovery of new cancer drugs.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
AI Oncology Research
Modella AI said that its “foundation models” and AI agents would be integrated into oncology research and development to support clinical development and biomarker discovery.
Modella and AstraZeneca, whose shares were flat in mid-trading, did not disclose the financial terms of the deal.
“Oncology drug development is becoming more complex, more data-rich and more time-sensitive,” said Gabi Raia, Modella AI’s chief commercial officer. Raia added that joining AstraZeneca would allow it to deploy its tools in global trials and clinical settings.
AstraZeneca said that the sector first would “supercharge” the company’s quantitative pathology and biomarker discovery efforts by bringing more data and AI capabilities in-house.
AstraZeneca chief financial officer Aradhana Sarin said Modella would accelerate its abilities to make pathology more quantitative – using computers to analyze biopsies for relevant proteins and correlate them with clinical data – so it can develop “highly targeted biomarkers and then highly targeted therapeutics.”
Test Drive Partners
The deal is an expansion of a multi-year collaboration that the companies unveiled in July. Sarin said that partnership served as a “test drive,” adding that AstraZeneca ultimately wanted Modella’s data, foundation models and AI talent in-house. She said AI tools could be used to more rapidly select patients for drug trials, which could increase the odds of clinical success and cut related costs.
AZN has been steadily building up AI partners to help transform its drug pipeline. Last year it struck a $555 million deal with U.S. biotech Algen Biotechnologies to develop AI-powered drugs. Under that deal, AstraZeneca gained exclusive rights to develop and commercialize gene therapies from Algen’s AI-driven AlgenBrain platform targeting immune system-related disorders.
Is AZN a Good Stock to Buy Now?
On TipRanks, AZN has a Strong Buy consensus based on 5 Buy ratings. Its highest price target is $108. AZN stock’s consensus price target is $102.75, implying a 9.69% upside.
