Amyotrophic lateral sclerosis (ALS) research has revealed genetic mutations linked to the motor neuron death characteristic of the disease. While such research is generating drug candidates, their reach will be limited, according to Verge Genomics CEO Alice Zhang. The mutations they address are ultra-rare, so drugs that address these targets will still leave many ALS patients without a treatment, she said.

Verge’s artificial intelligence technology has uncovered additional genes associated with ALS, and Zhang contends that these targets have the potential to address a broader spectrum of patients. Eli Lilly sees enough promise in Verge’s work to strike up a partnership to discover and develop new ALS drugs.

The alliance announced Thursday spans three years and pays Verge $25 million. That sum is a combination of an upfront payment, an equity investment, and near-term payments associated with the research. The breakdown of these payments was not specified. San Francisco-based Verge will use its technology to validate ALS drug targets; Lilly may advance up to four of them through clinical development and potential commercialization. Depending on the progress of the ALS drug candidates, Verge could earn up to $694 million, plus royalties from the sales.

Verge, which has so far focused on developing small molecule drugs, benefits from Lilly’s capability to address ALS with new types of medicines, such as antisense oligonucleotides and gene therapies, Zhang said. Those genetic medicines will be directed to disease targets identified by Verge.

“We have this large hammer with genetic therapies,” Zhang said. “We can now identify better nails.”

Verge describes its approach to drug discovery as “all in human.” Zhang said animal models may have worked for lower-hanging fruit in drug discovery, but they are not very predictive of how a drug will work in humans for complex diseases such as neurodegenerative disorders. Verge has built a large, proprietary database of human brain tissue collected from samples obtained from brain banks and hospitals. Those samples are from patients with neurodegenerative disorders, such as ALS, Parkinson’s, and Alzheimer’s disease. Verge sequences those samples to capture the entire expression of the genome, which is then mined by machine-learning algorithms. Insights from the analyses reveal targets for Verge’s drugs.

Supported by its AI-driven platform, Verge has built an internal pipeline of drug candidates. The most advanced of the lot is an ALS drug that targets PIKfyve, a lipid kinase that’s key to the formation of lysosomes, the cellular disposal system that gets rid of old or damaged proteins, Zhang said. Inability to clear away protein aggregates leads to cellular dysfunction, making the cells susceptible to ALS. Hitting PIKfyve with a drug is intended to restore or bolster lysosomal function to normal or closer to normal, which is hoped to slow the death of motor neurons, Zhang said. Verge’s PIKfyve-targeting small molecule is on track to begin clinical testing next year.

The Lilly neuroscience pipeline includes clinical-stage drugs for Alzheimer’s disease, Parkinson’s, and frontotemporal dementia. Zhang said that Lilly reached out to Verge, intrigued by how the company’s technology led to the discovery and advancement of its PIKfyve-targeting drug in ALS. That molecule will remain with Verge to develop. The ALS targets covered by the Lilly partnership will be selected by both companies. If a target is best addressed by a small molecule, Verge will pursue it. But if it’s best addressed by a genomic medicine, Lilly will take over.

Neurodegenerative disorders have been Verge’s focus from its start, but the startup’s ALS research has opened up additional opportunities. Nearly a year ago, Nature published research from the Icahn School of Medicine at Mount Sinai, which evaluated about 12,000 drugs—experimental and FDA-approved—for activity against the novel coronavirus. A PIKfyve kinase inhibitor was found to be among the most effective. Research found that in addition to its role in lysosomes, PIKfyve is also important for how SARS-CoV-2 enters cells, Zhang said. Blocking it is thought to block the virus’s ability to release its RNA into a cell, preventing viral replication.

Verge is developing a PIKfyve-blocking antiviral called VRG101 and it has some early data to support it. In lab tests, the drug showed antiviral activity against the novel coronavirus in multiple cell lines. It also showed activity against other coronaviruses. In preclinical research in Covid-19-infected hamsters, four days of treatment with the Verge antiviral showed “significant improvement” in the lungs compared to controls. The data are scheduled to be presented on June 12  during the European Congress of Clinical Microbiology & Infectious Diseases.

The emergence of SARS-CoV-2 variants means that there’s a need for antivirals that complement the vaccines, Zhang said. The Verge drug will be oral, a pill, making it an easier formulation for patients to take compared to the infusions and injectable versions that are currently available.

Recognizing that antiviral drugs are outside of Verge’s neuro focus, Zhang said that her company will look for a partner to develop this pill. Verge already has three partnerships with undisclosed pharmaceutical companies. Zhang said those agreements were made earlier in Verge’s history, and mainly involved applying the company’s AI tech to data provided by the pharmaceutical companies.

The alliance with Lilly makes the Indianapolis-based pharmaceutical giant Verge’s first publicly announced partner. Zhang said Verge will be working on ALS with Lilly exclusively for the next three years. But Verge is not currently seeking additional neuroscience partners. Zhang said her vision continues to be building Verge into a fully integrated therapeutics company that discovers, develops, and eventually sells its own drugs. She added that the Lilly deal is consistent with that goal.

“It allows us to focus, make a couple of concentrated bets on programs we think are likely to succeed, but still capture value from these other opportunities, especially if the partner has complementary capabilities,” she said.

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