Algorae Pharmaceuticals to use R&D tax rebate to advance AI-driven drug discovery programs

Algorae Pharmaceuticals (ASX: 1AI) has received a tax rebate of $451,359 from the Australian Taxation Office (ATO) for eligible research and development (R&D) activities conducted during the 2023 and 2024 financial years.

The rebate falls under a federally administered tax incentive program available to different industries with the aim of shaping Australia’s economic future and bolstering its global competitiveness.

Algorae’s rebate provides it with a significant non-dilutive cash injection that the company will apply to advancing its artificial intelligence-driven drug discovery programs and pharmaceutical development pipeline.

Drug targets

Algorae announced in November that it had finalised an initial catalogue of 24 drug targets generated by Version 1.0 of the Algorae Operating System (AlgoraeOS) platform.

The targets apply to a range of oncology medical indications with significant unmet needs that includes breast and lung cancer, leukaemia and glioblastoma.

Algorae has reviewed each for their commercial and intellectual property potential and will take them to preclinical studies at an Australian pharmaceutical drug laboratory.

In vitro assessments will verify their efficacy and safety and help de-risk further development within the company or in partnership with other firms.

Heart and dementia treatment

One of the targets is AI-168, a treatment for cardiovascular disease that the company will subject to in vivo studies after preclinical work conducted at the Victorian Heart Institute at Monash University showed the drug to have strong cardioprotective effects.

Algorae will also be progressing clinical trial planning for AI-116, a fixed-dose combination drug candidate comprising donepezil and cannabidiol to treat neurodegenerative disorders and dementia.

The drug has outperformed first-line dementia treatment donepezil hydrochloride in neuroprotection studies.

Complex algorithms

The AlgoraeOS platform uses complex algorithms and machine-learning models to predict fixed-dose combination drugs.

These combine two or more active pharmaceutical ingredients into a single dosage form.

The platform is hosted by the ‘Gadi’ supercomputer operated by National Computational Infrastructure Australia and has previously been used for applications such as climate modelling and natural disaster prediction.