Illumina, Deerfield Ink Drug Development Deal

Illumina, Inc. is expanding its reach into drug discovery and development.

On May 5, the San Diego DNA sequencing giant announced a partnership with New York-based healthcare investment management firm Deerfield Management to apply a genetic-led approach to develop novel therapies for diseases with unmet medical needs.

The five-year partnership will leverage Illumina’s genomic tools and data with Deerfield’s operational and financial expertise managing $14 billion in AUM (assets under management) across 200 public and private portfolio companies – many in the therapeutic space – to guide successful candidates through clinical development.  

Under the terms of the partnership with Deerfield, Illumina will provide a DNA-driven target discovery platform alongside its AI-powered genome interpretation software while Deerfield will provide expertise in translational science and help guide new drug candidates through preclinical testing.

“This partnership serves as a new company (NewCo) creation engine where Illumina and Deerfield will jointly decide whether to progress validated targets into pre-clinical development, at which point a NewCo will be formed,” said Illumina CTO Alex Aravanis.

“It is a co-ownership model that gives both Illumina and Deerfield equity in the NewCo, generating drug target assets with long-term optionality that includes royalties if a drug reaches the market,” Aravanis added. “The partnership is openly structured where both parties are aligned in near and long-term success.”

Improving Discovery

Currently, drug discovery lacks a strong success rate, with 90% of therapies failing in development.

Illumina Chief Strategy and Corporate Development Officer Joydeep Goswami said this is due to “gaps in the biological understanding of the complex nature of many diseases” and a drug discovery process that is “difficult, expensive and slow.”

Goswami pointed out that Deerfield VP of Genetics and Genomics Matt Nelson’s paper published in “Nature” supported using genetic data to select the best targets and indications in discovery and can improve success rates, speed to market, and cost in the development of new drugs.  

“Our partnership will work to create efficiencies across the drug development process, through data and AI, and change how we can bring novel therapeutics to market, overcoming the hurdles traditional models have failed to overcome,” Aravanis added.

“Leveraging Illumina’s sequencing platform to grow data assets at massive scale, our best-in-class AI tools to interpret the genome and Deerfield’s deep scientific and investment expertise in the therapeutics space, we believe this is a unique engine to industrialize drug development.”

Illumina and Deerfield plan to identify therapeutic targets using Illumina’s genetically driven target discovery platform built with Illumina Connected Analytics and AI-driven genome interpretation solutions.

“Illumina is an innovative global leader in genomics,” said Deerfield Management Managing Partner James Flynn. “Together, with Deerfield’s expertise in translational research, the partnership will fuel advancements from idea to clinic more efficiently with the goal of treating some of the world’s most life-threatening diseases.”

Partnership Goals

Deerfield has set a goal for the second half of the year to come together with some outputs in how the targets will be selected and begin funding them.

“Our hope is to have multiple programs that we are funding and moving through the discovery and development phase,” Flynn said, and cited cancer therapeutic company Nuvalent as a recent example of a Deerfield company advancing into the clinical phase.

Aravanis said this partnership with Deerfield builds on Illumina’s “growing efforts in drug discovery and pointed to similar collaborations – one recently launched with Belgium-based Janssen Pharmaceuticals, a division of Johnson & Johnson and another announced earlier in the year with Nashville Biosciences.

“We’re using our high-quality genomic data and world-class AI and machine learning capabilities to help pharma drive more efficient drug development,” Aravanis said. “Various demographics or populations may have distinct genetic variations that can affect the treatment of disease, and as these datasets become more diverse, we can also support more effective drug development by improving data equity, which will have positive implications across precision medicine, from development to screening, selection and monitoring.” 

Illumina, Inc.

Founded: 1998

CEO: Francis deSouza

Headquarters: San Diego

Business: DNA sequencers and assays

Stock: ILMN (NASDAQ)

Revenue: $4.517 billion (2021)

Employees: 7,825

Website: illumina.com

Notable: Illumina is the world’s leading genomic sequencing company.