Variational AI, Inc., a generative AI drug discovery company based in Vancouver, Canada, has announced a strategic collaboration with Merck, known as MSD outside the United States and Canada, to leverage Variational AI’s Enki™ platform in the discovery and development of novel small molecule therapeutics against two undisclosed targets. Under the terms of the agreement, Variational AI will deploy a customized, fine-tuned version of its Enki™ platform—trained on Merck’s proprietary data—to generate and optimize small molecule candidates tailored to Merck’s specified therapeutic targets. Merck will hold exclusive rights to develop and commercialize any resulting compounds. In return, Variational AI will receive an upfront payment and is eligible to earn milestone payments, with the total potential value of the deal reaching up to $349 million. Handol Kim, CEO of Variational AI, said the collaboration represents a powerful application of the company’s machine learning expertise. “We are excited to apply our proprietary machine learning algorithms to Merck’s extensive and valuable datasets to create unique, fine-tuned generative models of unprecedented power and accuracy,” Kim said. “This is a compelling framework that has the potential to significantly accelerate and redefine the unit economics of drug discovery.” Robert M. Garbaccio, Ph.D., Vice President and Head of Discovery Chemistry at Merck Research Laboratories, emphasized Merck’s commitment to advancing AI-driven innovation in early-stage drug discovery. “At Merck, we are working to harness the potential of AI to improve efficiency, speed, and quality of candidates earlier in the discovery continuum,” Garbaccio said. “We look forward to working with Variational AI to apply their Enki™ platform to challenging therapeutic targets.” The Enki™ platform is built on a foundation model trained on a comprehensive dataset combining Variational AI’s internal research data, a curated version of all publicly available chemical and biological information, and advanced generative AI models. This enables the platform to design novel small molecules with optimized properties aligned with specific target profiles, significantly increasing the likelihood of success in preclinical and clinical development. Founded by machine learning experts from institutions including MIT, Caltech, Google Research, Microsoft Research, and D-Wave Quantum, Variational AI is a venture-backed company dedicated to transforming drug discovery through generative AI. The company continues to expand its capabilities and partnerships to bring transformative therapies to patients faster.