AstraZeneca PLC (NASDAQ: AZN) said Thursday it's teaming up with Insitro, an artificial intelligence-driven drug developer, to go after new treatments for some notoriously tricky liver and heart diseases.

The idea here is straightforward enough: use AI to find better drug targets for metabolic dysfunction-associated steatohepatitis (MASH) and cardiomyopathies, two areas where the biology is messy and the unmet need is large.

Why AstraZeneca Is Leaning on AI

Under the agreement, Insitro will deploy its Virtual Human AI platform to uncover the biological and genetic drivers behind these diseases. That platform blends large-scale human and cellular data with AI-powered analysis to flag promising drug targets and help design new medicines.

Insitro will push selected targets through the discovery process all the way to the development candidate stage. From there, AstraZeneca steps in with its clinical development and regulatory expertise to move potential treatments closer to patients.

AstraZeneca executive Sharon Barr said picking the right biological targets remains one of the biggest headaches in drug development. She expects this partnership to sharpen target selection and speed up the discovery of potential therapies.

Insitro CEO Daphne Koller pointed to AI's potential to surface genetic insights into MASH and cardiomyopathies, two conditions that stay underdiagnosed and are hard to treat.

The Money: $40 Million Now, $1.5 Billion Maybe

On the financial side, AstraZeneca will pay Insitro $40 million upfront. Insitro could also collect roughly $1.46 billion in development and commercial milestone payments, which brings the total potential deal value to about $1.5 billion.

On top of that, Insitro is eligible for single-digit royalties on global commercial sales of any resulting therapies. AstraZeneca, meanwhile, will hold exclusive worldwide rights to develop and commercialize selected programs identified through the collaboration.

Filling Out the Cardiometabolic Pipeline

The agreement fits AstraZeneca's broader push to expand its cardiovascular, renal and metabolism business. The company is working on treatments that target the underlying causes of diseases affecting the heart, kidneys, liver and pancreas.

By folding AI into early-stage research, AstraZeneca is betting it can make drug discovery more efficient and bulk up its pipeline of potential cardiometabolic therapies.

AZN Price Action: AstraZeneca shares were up 4.05% at $168.60 at the time of publication on Thursday, according to market data.