Andrew Hopkins, Exscientia

Black­Rock push­es Ex­sci­en­tia Se­ries C to $100M as AI biotech boom con­tin­ues

The ju­ry’s still out on whether the first wave of AI com­pa­nies can sig­nif­i­cant­ly change drug de­vel­op­ment, but in­vestors are in­creas­ing­ly buy­ing in­to the hype.

Ex­sci­en­tia, the decade-old UK ma­chine learn­ing out­fit, an­nounced Thurs­day that they’ve ex­pand­ed their Se­ries C, first an­nounced in May, from $60 mil­lion to $100 mil­lion. The ex­pan­sion most no­tably in­cludes Black­Rock, the pri­vate eq­ui­ty firm that has been wad­ing deep­er and deep­er in­to biotech. They now join No­vo Hold­ings, Bris­tol My­ers Squibb and oth­ers among the com­pa­ny’s most re­cent back­ers.

William Abecas­sis

“Ex­sci­en­tia is break­ing ground in small mol­e­cule drug de­sign, with a plat­form that rad­i­cal­ly im­proves drug dis­cov­ery” William Abecas­sis, head of Black­Rock’s biotech fund In­no­va­tion Cap­i­tal, said in a state­ment. “We are thrilled to be in­vest­ing in this world-class team, who are al­ready de­liv­er­ing re­sults with AI-de­signed drugs now en­ter­ing clin­i­cal tri­als.”

One of the first AI biotechs that emerged in the ear­ly 2010s promis­ing to ac­cel­er­ate drug de­vel­op­ment by screen­ing for mol­e­cules far faster than hu­man chemists, Ex­sci­en­tia an­nounced in 2020 that they brought the first AI-dis­cov­ered drug in­to hu­man tri­als. It was a du­bi­ous claim, de­pen­dent on pre­cise­ly what one means by AI-de­vel­oped; Re­cur­sion Phar­ma­ceu­ti­cals had claimed the same man­tle not long be­fore.

Still, Ex­sci­en­tia has emerged as a clear win­ner of the first round of AI drug de­vel­op­ers, part­ner­ing with Bay­er, Bris­tol My­ers, Sanofi, Glax­o­SmithK­line, Evotec and Sum­it­o­mo Da­nip­pon among oth­ers.

Oth­er com­pa­nies that emerged around the same time have al­so found mo­men­tum and dol­lars. Re­cur­sion land­ed a $239 mil­lion mega-round and a $1 bil­lion Bay­er part­ner­ship in Sep­tem­ber.  Atom­wise, a com­pa­ny that start­ed out at Y Com­bi­na­tor and re­ceived crit­i­cism for over­hyp­ing its ser­vices, more than tripled its to­tal ever fundrais­ing with a $123 mil­lion Se­ries B.

At the same time, oth­er com­pa­nies have popped up, most promi­nent­ly Daphne Koller’s In­sitro, which raised near­ly $250 mil­lion and scored a big-mon­ey part­ner­ship with Gilead with­in 2 years of its 2018 launch. But al­so a raft of oth­er small­er biotechs, in­clud­ing Gen­e­sis Ther­a­peu­tics and Rever­ie Labs, that have launched teamed with big biotech or Big Phar­ma and raised small to mid-sized rounds.

The pan­dem­ic al­so brought the AI field one of its first con­crete suc­cess­es: Ear­ly in the out­break, Benev­o­lent AI iden­ti­fied Eli Lil­ly’s JAK in­hibitor baric­i­tinib as a po­ten­tial treat­ment for Covid-19. Lil­ly pushed it through pre­clin­i­cal and clin­i­cal de­vel­op­ment on their sug­ges­tion, even­tu­al­ly show­ing it im­proved time-to-re­cov­ery in hos­pi­tal­ized pa­tients and land­ing an EUA from the FDA.

Ex­sci­en­tia will use the cash to keep scal­ing the ma­chine learn­ing plat­form they’ve used to iden­ti­fy can­di­dates for Big Phar­ma but al­so to ex­pand their abil­i­ty to de­vel­op their own pipeline of drugs. It’s a piv­ot sev­er­al of the first AI biotechs have made as they raise more cap­i­tal and ex­pand op­er­a­tions. Ex­sci­en­tia said they’ve dou­bled in size over the past year and now em­ploy over 100 peo­ple.

“We are de­light­ed that Black­Rock shares our vi­sion for rev­o­lu­tion­is­ing how drugs are dis­cov­ered,” CEO An­drew Hop­kins said in a state­ment. “Black­Rock’s in­vest­ment is an im­por­tant step in our vi­sion that all drugs will be de­signed by AI. I be­lieve that our com­pa­ny’s reimag­ined ap­proach to drug dis­cov­ery will be­come the new de fac­to stan­dard.”

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Roche's Tecen­triq cross­es the fin­ish line first in ad­ju­vant lung can­cer, po­ten­tial­ly kick­ing off gold rush

While falling behind the biggest PD-(L)1 drugs in terms of sales, Roche has looked to carve out a space for its Tecentriq with a growing expertise in lung cancer. The drug will now take an early lead in the sought-after adjuvant setting — but competitors are on the way.

The FDA on Friday approved Tecentriq as an adjuvant therapy for patients with Stage II-IIIA non small cell lung cancer with PD-(L)1 scores greater than or equal to 1, making it the first drug of its kind approved in an early setting that covers around 40% of all NSCLC patients.

Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.

Susan Galbraith, Executive VP, Oncology R&D, AstraZeneca

As­traZeneca on­col­o­gy R&D chief Su­san Gal­braith: 'Y­ou're go­ing to need or­thog­o­nal com­bi­na­tion­s'

 

Earlier in the week we broadcast our 4th annual European Biopharma Summit with a great lineup of top execs. One of the one-on-one conversations I set up was with Susan Galbraith, the oncology research chief at AstraZeneca. In a wide-ranging discussion, Galbraith reviewed the cancer drug pipeline and key trends influencing development work at the pharma giant. You can watch the video, above, or stick with the script below. — JC

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Yao-Chang Xu, Abbisko Therapeutics founder and CEO

Qim­ing-backed Ab­bisko makes $200M+ Hong Kong de­but, as a SPAC and Agenus spin­out al­so price on Nas­daq

Three new entities priced their public debuts late Thursday and early Friday, including a SPAC, a traditional Nasdaq IPO and a Chinese biotech joining the Hong Kong Index.

Shanghai-based Abbisko Therapeutics raised the most money of the triumvirate, garnering $226 million in its Hong Kong debut and pricing at HK$12.46, or roughly $1.60 in US dollars. The blank check company followed up with a $150 million raise, while MiNK Therapeutics priced on Nasdaq at $12 per share and a $40 million raise.

Paul Grayson, Tentarix CEO (Versant)

Phar­ma vet­er­ans re­group with $50M and a plan to dis­cov­er new mul­ti-specifics

While a horde of drugmakers develops bispecific antibodies to more directly target tumor cells — there were about 100 programs in or nearing clinical trials back in May — a new company is emerging to go one step further.

On Thursday, Tentarix Biotherapeutics unveiled a $50 million Series A round to support its next-gen multi-specifics platform. While the field has largely focused on bispecifics, which engage two targets, Tentarix believes its multifunctional programs have the potential to be even more specific, since more conditions must be met for potent activity to occur.

Tillman Gerngross, Adagio CEO

Q&A: Till­man Gern­gross ex­plains why his Covid mAb will have an edge over an al­ready crowd­ed field

If anyone knows about monoclonal antibodies, it’s serial entrepreneur, Adimab CEO, and Dartmouth professor of bioengineering Tillman Gerngross.

Even the name of Gerngross’ new antibody startup Adagio Therapeutics is meant to reflect his vision behind the development of his Covid-19 mAb: slowly, he said, explaining that “everyone else, whether it’s Regeneron, Lilly, or AstraZeneca, Vir, they all valued speed over everything.”

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