Check out five upcoming AI players attracting investor attention for their potential to speed up drug discovery.
Drug discovery is a laborious undertaking that traditionally involves lots of trial-and-error drug screening to arrive at a potential candidate for further development. For this reason, the process can take several years and many millions of dollars to complete.
In the last decade, increasing advancements in computing and artificial intelligence (AI)-based tools have shown the potential to speed up drug discovery. For example, AI algorithms can be designed to pore over enormous omics and clinical datasets for potential drug targets more accurately and quickly than before. They can also simulate the molecular properties of drug candidates to reduce the need for physical testing.
Big pharma and biotech companies are busy collaborating with major AI providers such as Exscientia and InSilico Medicine to turbocharge their pipelines. This is one of the drivers for rapid growth in the sector, with the global market expected to soar from $1.1 billion in 2022 to $9.1 billion by 2030.
Many venture capitalists and strategic investors are piling on promising startups that offer AI to boost drug discovery efforts. Even companies that are historically more in the tech sphere such as Nvidia Corp and Alphabet are increasingly drawn to the appeal of applying AI in drug development.
We explore five upcoming startups that have raised big venture capital rounds in recent years to bankroll the development of their AI-driven drug discovery tools.
BenchSci
Headquarters: Toronto, Canada
Founded: 2016
BenchSci was founded to serve pharmaceutical and biotech R&D specialists. The company launched its first application in 2017 called AI-Assisted Antibody Selection, which reads text and images from a vast database of 19 million scientific publications. The technology uses machine learning models to understand the experiments and data like a PhD scientist could and help researchers to cut the failure rate in their experiments.
Later on, BenchSci applied its technology to improving our knowledge of disease biology, which would later become its ASCEND platform. The technology has helped customers to find novel drug targets and disease indications in 22% of their key projects and reduced unnecessary experimentation by 40%, according to the company.
BenchSci raised a Series D funding round worth US $70 million in May 2023 to finance the development of ASCEND. The round, led by Generation Investment Management joined by existing investors including iNovia Capital and TCV, takes the company’s total investments to US $170 million.
Late last year, Alphabet-owned Google, one of BenchSci’s backers, launched the latest of its AI-based models specialized to healthcare and BenchSci was one of the first firms to test the models in its operations.
Causaly
Headquarters: London, UK, and San Francisco, California, US
Founded: 2018
Causaly was set up by a team of computer scientists and is developing a platform that harnesses AI models to read biomedical literature with natural language understanding. This lets the technology produce answers for users via generative AI that could have taken weeks to produce with traditional research.
For example, the company’s software can be used to discover biomarkers that can be used to track the safety and the resistance of cancers to drugs such as the drug rituximab.
Causaly bagged $60 million in a Series B round in July 2023 to expand the commercialization of its technology. The round took Causaly’s total winnings to $93 million and was led by ICONIQ Growth with participation from investors including Index Ventures, and current and former executives from Johnson & Johnson and Datadog.
The round came as the company had just tripled its revenue with 12 of the top 20 pharma companies on its customer list.
Evozyne
Headquarters: Chicago, Illinois, US
Founded: 2020
There is an overwhelming range of possible protein designs in existence, which can make it difficult to design proteins optimal for use in healthcare and other industries. In response to this challenge, Evozyne was set up by the company builder Paragon Biosciences to engineer proteins using AI.
Evozyne’s technology deploys computational chemistry and an evolutionary process to produce the most optimal proteins. For example, the firm is developing protein drugs to take on autoimmune diseases by selectively breaking down antibodies responsible for the condition. It is also working on customized versions of the gene editing tool CRISPR to access more of the genome than traditional versions of the tool.
The company’s $81 million Series B round, closed in September 2023, is being used to bankroll the development of its technology. The round was led by Fidelity Management & Research Company and OrbiMed, with contributions from NVentures, Nvidia’s venture capital arm. The company also worked with Nvidia to validate a new AI model and with Takeda to develop engineered protein treatments.
“Our next three years will be tightly focused on maximizing our generative AI platform for drug development and carbon capture, while we develop a portfolio of gene editors and enzymes that modulate immune response,” said Evozyne CEO Mike Gamson in a public statement.
Genesis Therapeutics
Headquarters: Burlingame, California, US
Founded: 2019
Genesis makes the list with a whopping $200 million Series B round raised in August 2023, taking its total investments to $280 million. The round was aimed to expand the company’s pipeline of AI-derived small molecule candidates for previously undrugged targets. The firm is also investing in its drug development platform and beginning the clinical development of some candidates.
Genesis was founded based on research in Stanford University and its platform, dubbed Genesis Exploration of Molecular Space (GEMS), deploys chemistry, quantum physics and machine learning to generate billions of potential drug candidates and predict potency and selectivity. The company also uses a type of AI method to model how protein structures impact their binding to a drug molecule.
Genesis is already using its AI expertise to work with the big pharma company Eli Lilly in a $670 million collaboration to develop therapies for up to five targets in undisclosed therapy areas.
Genesis’ latest funding round was led by an undisclosed US life sciences investor in addition to returning investor Andreessen Horowitz (a16z) Bio + Health. Other investors that pitched in include Fidelity Management & Research Company, BlackRock, and NVentures.
Xaira
Headquarters: San Francisco, California, US
Founded: 2023
Xaira stormed onto the pharmaceutical scene in April this year with more than $1 billion in investments led by founding investors ARCH Venture Partners and Foresite Capital, along with a queue of other investment firms.
The firm is led by experts from organizations including Genentech, Meta and UW Medicine Institute, and blends functional genomics expertise from Illumina and proteomics from Interline Therapeutics.
Xaira is building a strategy that combines machine learning, drug development and data generation for powering new models. It bases its technology on RFdiffusion and RFantibody, models for protein and antibody design that can be used to develop treatments across different modalities. The company also plans to feed data from lab and clinical experiments into the models, creating a feedback loop where drug development improves its AI models.
“We have reached the point where AI finally allows us to see biology in new ways, and translate those discoveries to better treatments for disease,” said Robert Nelsen, managing director and co-founder of ARCH Venture Partners, in a public statement. “This creates an enormous opportunity for us to rethink drug discovery entirely. For this reason, Xaira is the largest initial funding commitment in ARCH history.”
