Fu­eled with a fresh half-bil­lion dol­lars as AI in­vest­ments boom, Ex­sci­en­tia is hit­ting the gas on drug de­vel­op­ment

Can AI rev­o­lu­tion­ize the way new drugs are found and de­vel­oped? For Ex­sci­en­tia, that’s now the half-bil­lion-dol­lar ques­tion.

It hasn’t been two months since Ex­sci­en­tia ex­pand­ed its Se­ries C round, but the decade-old ma­chine learn­ing out­fit is al­ready back at the ven­ture well, this time pulling in up to $525 mil­lion for its AI plat­form and pipeline.

The raise in­cludes a $252 Se­ries D round, plus a $300 mil­lion eq­ui­ty in­vest­ment by Soft­Bank that can be drawn at the com­pa­ny’s dis­cre­tion. The Soft­Bank Vi­sion Fund 2 led the Se­ries D, with a hand from No­vo Hold­ings, Black­Rock, Mubadala In­vest­ment, Far­al­lon Cap­i­tal, Cas­din Cap­i­tal, GT Health­care Cap­i­tal, Mar­shall Wace, Piv­otal bioVen­ture Part­ners, Lau­ri­on Cap­i­tal, Hongk­ou and Bris­tol-My­ers Squibb.

Uni­ver­si­ty of Dundee chemist An­drew Hop­kins found­ed Ex­sci­en­tia back in 2012 to build a com­pu­ta­tion­al plat­form that could help more tra­di­tion­al drug­mak­ers find new ther­a­pies faster. The team has since de­vel­oped a plat­form it be­lieves can be used to “pre­ci­sion en­gi­neer” new med­i­cines, us­ing AI for process­es like tar­get iden­ti­fi­ca­tion, drug de­sign and pa­tient se­lec­tion.

“Drug de­sign is pre­ci­sion en­gi­neer­ing at the mol­e­c­u­lar scale,” the com­pa­ny said in a state­ment. Its plat­form learns from a wide range of da­ta, us­ing al­go­rithms to iden­ti­fy hy­pothe­ses, gen­er­ate mol­e­c­u­lar de­signs, and se­lect which mol­e­cules to syn­the­size and test.

“Our AI plat­form has al­lowed us to achieve these re­sults sev­er­al years faster than in­dus­try stan­dards,” CEO An­drew Hop­kins told End­points News in an email.

So far, the com­pa­ny has put forth sev­en drug can­di­dates at an av­er­age speed of 12 months each, ver­sus the in­dus­try stan­dard of three to sev­en years, he said.

Af­ter rack­ing up part­ner­ships with biotechs and Big Phar­ma, Ex­sci­en­tia land­ed its first large fi­nanc­ing round last May, rais­ing $60 mil­lion in a C round led by No­vo Hold­ings. Then ear­ly last month, an in­vest­ment from Black­Rock pushed the round to $100 mil­lion.

Now, with two Evotec and Sum­it­o­mo Dainip­pon Phar­ma-part­nered can­di­dates in the clin­ic, Ex­sci­en­tia plans on scal­ing its op­er­a­tions and de­vel­op­ing an in­ter­nal pipeline of on­col­o­gy, im­muno-on­col­o­gy and im­munol­o­gy drugs.

“Our pa­tient-first AI plat­form has re­peat­ed­ly demon­strat­ed its abil­i­ty to pre­ci­sion de­sign drugs that ad­dress pa­tients’ needs and we in­tend to con­tin­ue ex­pand­ing our tech­nol­o­gy plat­form to­ward full end-to-end au­tonomous drug de­sign,” Hop­kins said.

Ex­sci­en­tia claims its OCD can­di­date de­vel­oped with DSP was the first AI-de­vel­oped drug to en­ter the clin­ic, though the claim has been made by oth­er biotechs.

In­vestors con­tin­ue to open their wal­lets for AI com­pa­nies tak­ing on the chal­lenge of de­vel­op­ing bet­ter drugs faster. Re­cur­sion nabbed a $239 mil­lion mega-round and a $1 bil­lion Bay­er part­ner­ship back in Sep­tem­ber — fol­lowed by a $436 mil­lion IPO. Ear­li­er, Atom­wise, which got its start at Y Com­bi­na­tor and was crit­i­cized for over­hyp­ing its ser­vices, more than tripled its to­tal fundrais­ing with a $123 mil­lion Se­ries B. Daphne Koller’s in­sitro raised a $400 mil­lion Se­ries C round just last month. And oth­ers, like Gen­e­sis Ther­a­peu­tics and Rever­ie Labs, keep crop­ping up.

In Jan­u­ary, As­traZeneca added the first tar­get gen­er­at­ed by AI to its port­fo­lio, as the re­sult of a part­ner­ship with Benev­o­len­tAI that traces back to 2019. Benev­o­len­tAI was the com­pa­ny that iden­ti­fied Eli Lil­ly’s JAK in­hibitor baric­i­tinib as a po­ten­tial treat­ment for Covid-19, which has since land­ed emer­gency use au­tho­riza­tion from the FDA.

“We be­lieve Ex­sci­en­tia’s in­no­v­a­tive use of AI to dis­cov­er and de­sign bet­ter qual­i­ty drugs with greater ef­fi­cien­cy has the po­ten­tial to cre­ate im­por­tant med­i­cines faster than ever be­fore,” Er­ic Chen, man­ag­ing part­ner at Soft­Bank In­vest­ment Ad­vis­ers, said in a state­ment.

When asked if an IPO is on the hori­zon, Hop­kins re­spond­ed: “The com­pa­ny does not com­ment on po­ten­tial fu­ture fi­nanc­ings, but we would be hap­py to reach out on up­dates when they oc­cur.”

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.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 119,700+ biopharma pros reading Endpoints daily — and it's free.

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?

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

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

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

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.”

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.