Days af­ter news leaked that Benev­o­len­tAI had se­cured fund­ing at a rate that would halve its $2 bil­lion val­u­a­tion, the ma­chine learn­ing start­up of­fi­cial­ly an­nounced it raised $90 mil­lion from Sin­ga­pore-based Temasek for a mi­nor­i­ty stake.

The news deals an­oth­er blow to em­bat­tled fund man­ag­er Neil Wood­ford. Benev­o­len­tAI was one of two biotech AI star­tups, along with Ox­ford Nanopore, Wood­ford was re­port­ed­ly prep­ping for auc­tion to raise cash for his still frozen Eq­ui­ty In­come Fund. Nanopore’s $1.5 bil­lion val­u­a­tion re­mains steady, af­firmed by fel­low in­vestor IP Group.

For Wood­ford, the dam­age may have ac­tu­al­ly al­ready been done. Last week, Wood­ford Pa­tient Cap­i­tal Trust an­nounced they were forced to write down the val­ue of one of its as­sets, cost­ing the trust’s net val­ue 4 pence per share and an es­ti­mat­ed $52 mil­lion. The trust has now re­vealed that un­named in­vest­ment is Benev­o­len­tAI.

Nev­er­the­less, Benev­o­len­tAI’s de­flat­ed val­ue may cut in­to the price Wood­ford ul­ti­mate­ly fetch­es for his stake in the com­pa­ny. An FT in­ves­ti­ga­tion from June found Wood­ford’s two firms col­lec­tive­ly owned near­ly a fifth of the Cam­bridge-based biotech. The biotech, in turn, makes up 5,04% of the Eq­ui­ty In­come Fund and, per FT, is Wood­ford Pa­tient Cap­i­tal Trust’s largest sin­gle hold­ing, ac­count­ing for 9.81%.

Wood­ford has said he plans to have enough cash to re­open the Eq­ui­ty In­come Fund by De­cem­ber.

Benev­o­len­tAI’s val­ue rose ex­po­nen­tial­ly af­ter Wood­ford’s ini­tial in­vest­ment in Oc­to­ber, 2014. By its next fund­ing round in 2015, it had reached uni­corn sta­tus, ris­ing from, £190m to £1.16bn, ac­count­ing for 2.86% – near­ly one third – of the com­pa­ny’s 15.9% re­turn that year, ac­cord­ing to num­bers cit­ed by FT. By April 2019, less than two months be­fore Wood­ford was all but forced to sus­pend his fund, it had reached $2 bil­lion.

Benev­o­len­tAI and oth­er ma­chine learn­ing star­tups have been the buzz of biotech the last few years, with their tan­ta­liz­ing promise of cut­ting in­to the steep, now on av­er­age over-$2.5 bil­lion cost it takes to de­vel­op a new drug. Ex­act mod­els vary by com­pa­ny, but broad­ly they promise to cre­ate more tar­get­ed R&D by scan­ning the vast troves of sci­en­tif­ic lit­er­a­ture and mol­e­c­u­lar data­bas­es no hu­man or group of hu­mans could man­age and us­ing it to find pat­terns and de­duce which drugs or com­pounds are most like­ly to be ef­fec­tive. This month, a study from a small­er AI com­pa­ny, In­sil­i­co Med­i­cine, made both in­dus­try-fo­cused and main­stream head­lines when it showed its tech­nol­o­gy could not on­ly scan but al­so in­vent new mol­e­cules tai­lored to tack­le a dis­ease that proved ef­fec­tive in cell cul­tures and mice.

Benev­o­len­tAI ap­pears to have sim­i­lar soft­ware. It dis­tin­guish­es it­self by fo­cus­ing on rare dis­eases and by the re­search fa­cil­i­ty the com­pa­ny ac­quired in Cam­bridge last year, which it says will equip staffers to de­vel­op the drugs from iden­ti­fi­ca­tion by AI sys­tems to clin­i­cal re­search.

The com­pa­ny has part­ner­ships with As­traZeneca and No­var­tis to de­vel­op drugs for chron­ic kid­ney dis­ease and on­col­o­gy. In a state­ment, the com­pa­ny said the cash in­fu­sion will al­low it to “scale” its plat­form for dis­cov­ery and de­vel­op­ment and those col­lab­o­ra­tions will bring in “mean­ing­ful rev­enue” over the next few years.

So­cial im­age: Benev­o­len­tAI via YouTube

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition.

As Merck KGaA strives to prove itself as a capable biopharma R&D player, it has begun construction on a €250 million facility dedicated to developing and manufacturing drugs for use in clinical trials.

The German drugmaker chose a location at Corsier-sur-Vevey, Switzerland, where it already has a commercial manufacturing site, in order to “bridge together research and manufacturing.”

“This investment in the Merck Biotech Development Center reflects our commitment to speed up the availability of new medicines for patients in need, and confirms the importance of Switzerland as our prime hub for the manufacturing of biotech medicines,” CEO Stefan Oschmann said at the groundbreaking ceremony, according to a statement.

AstraZeneca kicked off Monday with a flurry of good news. Apart from unveiling positive results on its stroke trial testing its clot-fighter Brilinta, and welcoming its experimental IL-23 inhibitor brazikumab back from Allergan — the British drugmaker also disclosed some upbeat gastric cancer data on its HER2-positive oncology therapy it is collaborating on with Daiichi Sankyo.

Buoyed by the performance of its oncology drugs, last March AstraZeneca chief Pascal Soriot bet big to partner with Daiichi on the cancer drug, with $1.35 billion upfront in a deal worth up to roughly $7 billion. Roughly 8 months later, as 2019 drew to a close, the FDA swiftly approved the drug — trastuzumab deruxtecan — for use in breast cancer, months ahead of the expected decision date.

San Diego-based Sorrento Therapeutics isn’t going the M&A route — at least not today.

The biotech caused quite a stir when it put out word a few weeks ago that an unidentified private equity group was bidding a billion dollars-plus for the company. The news drove a quick spike in the company’s share price as investors hooked up for the ride — that didn’t happen.

The update sparked a 5% drop in the share price $SRNE ahead of the bell. It’s now trading just above $4, without any evidence that the $7 price looked like it was firm.