HONG KONG — Insilico Medicine entered into a partnership with SK Biopharmaceuticals valued at more than $2.5 billion to develop treatments for neuroimmune conditions, the company announced Monday in Hong Kong. Insilico will utilize its Pharma.AI platform to design drug candidates, while SK Biopharmarmaceuticals will manage late-stage development and commercialization.

The agreement marks Insilico's largest collaboration to date with an Asia-Pacific partner. Insilico is expected to receive $18 million in near-term payments, with the potential for the total deal value to reach $2.5 billion upon achieving specific development and commercial milestones. The deal also includes royalties.

This is the second deal of this size for Insilico with a major pharmaceutical company. In late March, Insilico signed a $2.75 billion deal with Eli Lilly, which focuses on novel oral therapeutics in preclinical development.

Insilico Medicine co-CEO Alex Zhavoronkov said, "We want to be the SpaceX of the pharmaceutical industry." He added, "The more I scale, the better my AI gets."

Donghoon Lee, president and CEO of SK Biopharmaceuticals, stated, "By combining Insilico's AI-powered drug discovery platform with SK Biopharmaceuticals' clinical development and U.S. commercialization capabilities, we believe we can accelerate the discovery of innovative CNS [central nervous systems] therapies for patients." He also said, "We see this collaboration as a scalable and repeatable growth platform that can be leveraged for future target discovery and development opportunities."

Insilico Medicine's shares rose 5.6% in Hong Kong trading on Monday following the announcement. Since its IPO in late December, Insilico Medicine's shares have risen by 35%. SK Biopharmaceuticals' shares dropped 1.7% on Monday and have declined 30% for the year.

Zhavoronkov noted, "Korea now has substantial resources driven by the boom in AI." He said, "Now that innovation is flowing into pharmaceuticals." He characterized Korean companies as "a bit more adventurous," adding, "They're willing to take a little bit more risk to get ultra-high novelty." Insilico, founded in Boston, Mass., maintains offices in mainland China, Hong Kong, and Abu Dhabi.

Insilico has multiple drugs in trials, including one targeting idiopathic pulmonary fibrosis currently in the Phase II stage. Zhavoronkov indicated, "If you use China as a platform, you're going to gain two years of speed at the pre-clinical level."