Merck recently announced a strategic collaboration agreement with Valo Health, potentially worth up to $3 billion, aimed at accelerating the development of innovative treatments for Parkinson's disease using artificial intelligence (AI) and machine learning technologies.

Under the terms of the agreement, Merck will make an undisclosed upfront payment to Valo Health and commit to additional payments totaling up to $3 billion upon achieving specific R&D, regulatory approvals, and commercialization milestones. The collaboration also includes R&D funding and tiered royalties on future product sales.

The division of labor between the two parties is clear: Valo Health will utilize its self-developed Opal computing platform to be responsible for the early identification of drug targets and the design and optimization of candidate molecules; Merck will be responsible for subsequent clinical development, registration and application, and global commercialization. This collaborative model of "AI biotechnology company + traditional pharmaceutical company" is becoming the mainstream in the industry—AI companies leverage their algorithm and data advantages, while pharmaceutical companies provide clinical development and commercialization capabilities.

At the heart of this collaboration is Valo Health's Opal computing platform. This platform integrates over 17 million real-world patient records, genomic data, clinical data, and biosample information, using AI and machine learning algorithms to deeply explore the causal biological mechanisms of diseases.

Parkinson's disease is a chronic, progressive neurodegenerative disease affecting over 10 million people worldwide, with approximately 1 million in the United States alone. Current treatments (such as levodopa) can only alleviate motor symptoms and cannot stop or reverse the disease's progression; long-term use can also cause side effects such as motor disorders.

It's worth noting that this isn't Merck's first foray into the Parkinson's disease field. The company suffered setbacks in a pivotal clinical trial in 2006 and terminated its collaboration with Newron in 2011. This "return to the battlefield" through AI technology demonstrates its strong confidence in the paradigm shift in technology.

The Merck-Valo deal is just a microcosm of the AI-driven drug development boom. In January 2024, Isomorphic Labs, a spin-off from Google's DeepMind, reached a $3 billion agreement with Eli Lilly and Novartis to utilize AlphaFold technology for drug discovery. That same month, Exscientia signed a $5.2 billion collaboration with Sanofi, setting a record for the largest single AI-driven drug development deal at the time.

Behind this $3 billion gamble lies Merck's keen insight into technological change and the strong backing of the Valo Health platform. Facing Parkinson's disease, a fortress yet to be conquered by humankind, AI is not only an efficiency tool but also a cognitive disruptor—potentially allowing scientists to glean insights into the essence of diseases from data on millions of patients and to virtually rehearse the fate of drugs.

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