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.”

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His­toric drug pric­ing re­forms pass; Pfiz­er ac­quires GBT; The long search for non-opi­oid pain drugs; 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.

The Endpoints Weekly has officially crossed the 60,000 mark on subscribers — thanks to all of your support. As the editorial team grows, we’ve been able to do a lot more, with many of those on display this week. Be sure to check out Lei Lei Wu’s deep dive on pain R&D. If you missed it, you may also rewatch her companion panel here.

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Gold for adults, sil­ver for in­fants: Pfiz­er's Pre­vnar 2.0 head­ed to FDA months af­ter Mer­ck­'s green light

Pfizer was first to the finish line for the next-gen pneumococcal vaccine in adults, but Merck beat its rival with a jab for children in June.

Now, two months after Merck’s 15-valent Vaxneuvance won the FDA stamp of approval for kids, Pfizer is out with some late-stage data on its 20-valent shot for infants.

Known as Prevnar 20 for adults, Pfizer’s 20vPnC will head to the FDA by the end of this year for an approval request in infants, the Big Pharma said Friday morning. Discussions with the FDA will occur first and more late-stage pediatric trials are expected to read out soon, informing the regulatory pathway in other countries and regions.

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Seagen interim CEO Roger Dansey and Daiichi Sankyo CEO Sunao Manabe

Paving the way for Mer­ck­'s buy­out, Seagen los­es ar­bi­tra­tion dis­pute with Dai­ichi over ADC tech

As Seagen awaits a final buyout offer from Merck that could be in the territory of $40 billion, Seagen revealed Friday afternoon that it lost an arbitration dispute with Daiichi Sankyo relating to the companies’ 2008 collaboration around the use of antibody-drug conjugate (ADC) technology.

But that loss likely won’t matter much when it comes to Merck’s deal.

After breaking off its pact with Daiichi in mid-2015, the two companies battled over “linker” tech — a chemical bridge between an ADC’s antibody component and the cytotoxic payload — that Seagen claims Daiichi would improve upon and implement in its current generation of ADCs.

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Tony Coles, Cerevel CEO

Cerev­el takes the pub­lic of­fer­ing route, with a twist — rais­ing big mon­ey thanks to ri­val da­ta

As public biotechs seek to climb out of the bear market, a popular strategy to raise cash has been through public offerings on the heels of positive data. But one proposed raise Wednesday appeared to take advantage not of a company’s own data, but those from a competitor.

Cerevel Therapeutics plans to raise $250 million in a public offering and another $250 million in debt, the biotech announced Wednesday afternoon, even though it did not report any news on its pipeline. However, the move comes days after rival Karuna Therapeutics touted positive Phase III data in schizophrenia, a field where Cerevel is pursuing a similar program.

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House pass­es his­toric drug pric­ing re­forms, lin­ing up decades-in-the-mak­ing win for Biden and De­moc­rats

The US House of Representatives today voted along party lines (all Dems voted for it), 220-207 to pass new, wide-ranging legislation that will allow Medicare drug price negotiations for the first time ever, and cap seniors’ drug expenses to $2,000 per year and seniors’ insulin costs at $35 per month.

Setting up a major victory for President Joe Biden, representatives returned from their summer recess to pass the Inflation Reduction Act, even as many noted the bill would only modestly reduce inflation.

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Senate Finance Committee Chair Ron Wyden (D-OR) (Francis Chung/E&E News/POLITICO via AP Images)

Sen­ate Fi­nance chair con­tin­ues his in­ves­ti­ga­tion in­to phar­ma tax­es with re­quests for Am­gen

Amgen is the latest pharma company to appear on the radar of Senate Finance Committee Chair Ron Wyden (D-OR), who is investigating the way pharma companies are using subsidiaries in low- or zero-tax countries to lower their tax bills.

Like its peers Merck, AbbVie and Bristol Myers Squibb, Wyden notes how Amgen uses its Puerto Rico operations to consistently pay tax rates that are substantially lower than the U.S. corporate tax rate of 21%, with an effective tax rate of 10.7% in 2020 and 12.1% in 2021.

FDA ap­proves sec­ond in­di­ca­tion for As­traZeneca and Dai­ichi's En­her­tu in less than a week

AstraZeneca and Daiichi Sankyo’s antibody-drug conjugate Enhertu scored its second approval in less than a week, this time for a subset of lung cancer patients.

Enhertu received accelerated approval on Thursday to treat adults with unresectable or metastatic non-small cell lung cancer (NSCLC) whose tumors have activating HER2 (ERBB2) mutations, and who have already received a prior systemic therapy.

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J&J to re­move talc prod­ucts from shelves world­wide, re­plac­ing with corn­starch-based port­fo­lio

After controversially spinning out its talc liabilities and filing for bankruptcy in an attempt to settle 38,000 lawsuits, Johnson & Johnson is now changing up the formula for its baby powder products.

J&J is beginning the transition to an all cornstarch-based baby powder portfolio, the pharma giant announced on Thursday — just months after a federal judge ruled in favor of its “Texas two-step” bankruptcy to settle allegations that its talc products contained asbestos and caused cancer. An appeals court has since agreed to revisit that case.