Valo CEO David Berry (Flagship Pioneering)

Koch's 'dis­rup­tive' VC bets $110M on one of Flag­ship's new, big com­pu­ta­tion­al star­tups

David Berry joined Flag­ship as a Har­vard and MIT wun­derkind in 2005 and by now he’s been at the firm al­most as long as any­one not named Noubar. He’s played a hand in some of their biggest star­tups, in­clud­ing Seres, Omega, KSQ, Evelo and, of course, Mod­er­na.

Flag­ship is known for its flash, but over the last cou­ple years, Berry has been qui­et­ly build­ing a com­pu­ta­tion­al start­up in Boston that he thinks can re­make drug de­vel­op­ment in a way that, for all the buzz, ma­chine learn­ing and ar­ti­fi­cial in­tel­li­gence have yet to do.

He’s man­aged to con­vince at least a few in­vestors of that vi­sion, rais­ing $100 mil­lion in a Se­ries A, $50 mil­lion in an undis­closed fi­nanc­ing and a $190 mil­lion in a Se­ries B de­spite re­main­ing far from the clin­ic. On Tues­day, Va­lo re­vealed an­oth­er in­vestor who bought in, adding $110 mil­lion from Koch Dis­rup­tive Tech­nol­o­gy, the ven­ture cap­i­tal arm of the famed and in­fa­mous hold­ing com­pa­ny Koch In­dus­tries.

Koch Dis­rup­tive Tech­nolo­gies has in­vest­ed in a broad swatch of tech com­pa­nies but not yet wad­ed deeply in­to biotech. In back­ing Va­lo, they are buy­ing in­to what Berry says is a new way of think­ing about drugs and tech and da­ta.

“As we look at the process that ex­ists in drug de­vel­op­ment or drug dis­cov­ery to­day, it’s ef­fec­tive­ly a point-to-point process and each of the steps has its own da­ta, its own way of mak­ing de­ci­sions,” Berry told End­points News. “As the drug moves through its var­i­ous steps, it’s as if it’s been thrown over a wall.”

AI and ma­chine learn­ing have large­ly been de­ployed at in­di­vid­ual steps of the drug de­vel­op­ment process: used by Atom­wise, for ex­am­ple, to screen mas­sive li­braries for the best mol­e­cule, or by In­sitro to find the dif­fer­ence be­tween dis­eased and healthy cells, and the places where de­vel­op­ers might be able to in­ter­vene and turn one to the oth­er. Sep­a­rate­ly, large phar­mas and small biotechs like Black­Thorn have used ma­chine learn­ing to de­sign tri­als and find the best pa­tients.

Berry ar­gues that we need a bet­ter sys­tem — a bet­ter plat­form — that can in­te­grate all those var­i­ous sources and ap­pli­ca­tions of da­ta from the out­set, al­low­ing com­pa­nies to over­come the hur­dles that tend to ap­pear as a drug goes through de­vel­op­ment. And that da­ta should be ground­ed in hu­mans (as op­posed to mice or mon­key ex­per­i­ments) to in­crease the odds that ba­sic lab in­sights ac­tu­al­ly trans­late in­to the clin­ic.

With about 110 em­ploy­ees, large amounts of hu­man da­ta, in­clud­ing what they claim is the “largest and most-de­tailed car­dio-meta­bol­ic dataset in the world,” and reams and reams of cloud space, they’ve built a plat­form they call Opal to do that.

For ex­am­ple, Berry claimed, they’ve de­vel­oped an al­go­rithm that al­lows them to pre­dict the tox­i­col­o­gy of any giv­en com­pound with 86% ac­cu­ra­cy. They al­so use 3D physics soft­ware to sim­u­late and de­sign mol­e­cules, adopt­ing a sim­i­lar ap­proach to the well-part­nered com­pu­ta­tion­al biotech Schrödinger, which has long ar­gued that the AI al­go­rithms many star­tups use to screen for mol­e­cules strug­gle be­cause they re­ly on 2D im­ages of 3D mol­e­cules.

“When you ask the com­put­er to try learn that a 2D im­age rep­re­sents a 3D struc­ture — that’s a very hard thing for a com­put­er to learn,” Berry said.

To find new tar­gets, the plat­form and Va­lo’s sci­en­tists com­bine “omics” da­ta – ge­nomics, pro­teomics, even the much less talked about metabolomics — with da­ta that track how pa­tients change as they age and their dis­eases progress or wane. “Dis­eases are dy­nam­ic,” he said.

Va­lo will use the new pro­ceeds to con­tin­ue hir­ing a few dozen more em­ploy­ees and progress the plat­form. With two years of run­way, it will al­so give them the cash to get in­to the clin­ic, Berry said. Al­though they haven’t gone deep in­to de­tails, Va­lo did re­lease their first batch of can­cer tar­gets ear­li­er this year: NAMPT, PARP1, USP28 and HDAC3.

Their tar­gets for neu­rode­gen­er­a­tion and car­dio­vas­cu­lar dis­ease re­main undis­closed.

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; 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.

With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Raymond Stevens, Structure Therapeutics CEO

Be­hind Fri­day's $161M IPO: A star sci­en­tist, GPCR drug dis­cov­ery and a plan to chal­lenge phar­ma in di­a­betes

What does it take to pull off a $161 million biotech IPO these days?

In Structure Therapeutics’ case, it means having a star scientist co-founder paired with the computational drug discovery company Schrödinger, $198 million in private funding from blue-chip investors, almost six years of research work on G protein-coupled receptors and a slate of oral, small-molecule drugs, with an eye on the huge and growing diabetes and weight-loss market.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Af­ter 13 years, Ramy Mah­moud steps in­to CEO seat at Opti­nose; Ru­pert Vessey set to ex­it Bris­tol My­ers in Ju­ly

After 13 years as president and COO at Optinose, Ramy Mahmoud has stepped into a new role as its CEO. He is taking the place of Peter Miller, who stepped down earlier this week, though Miller is still staying with the company as a consultant.

In 2010, the two business partners joined Optinose to take it in a new direction, transforming it from a delivery platform to product company. They previously worked together at Johnson & Johnson, when Miller was president at Janssen and Mahmoud headed medical affairs. Miller said after he learned about Optinose, “I did what I always do, which is find people smarter than me to talk with about the idea. And the first person I called was Ramy … and I said, ‘Hey, Ramy, what do you think of this technology?’”

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Te­va drops out of in­dus­try trade group PhRMA

Following in AbbVie’s footsteps, Teva confirmed on Friday that it’s dropping out of the industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA).

Teva didn’t give a reason for its decision to leave, saying only in a statement to Endpoints News that it annually reviews “effectiveness and value of engagements, consultants and memberships to ensure our investments are properly seated.”

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Sanofi CFO Jean-Baptiste de Chatillon (L) and CEO Paul Hudson (Romuald Meigneux/Sipa via AP Images)

Sanofi sees downtick in flu sales as it preps for launch of RSV an­ti­body

Sanofi expects its RSV antibody jointly developed with AstraZeneca will be available next season, executive VP of vaccines Thomas Triomphe announced on the company’s quarterly call.

Beyfortus, also known as nirsevimab, was approved in the EU back in November and is currently under FDA review with an expected decision coming in the third quarter of this year. The news comes as the FDA plans to hold advisory committee meetings over the next couple months to review RSV vaccines from Pfizer and GSK.

Christophe Weber, Takeda CEO (Photographer: Shoko Takayasu/Bloomberg via Getty Images)

Take­da fo­cus­es on ‘di­verse’ pipeline prospects on heels of two ac­qui­si­tions

After a whopping $4 billion asset buy from Nimbus Therapeutics, along with a $400 million deal with Hutchmed for a colorectal cancer drug, Takeda executives touted pipeline optimism on its latest earnings call this week.

That’s because the TYK2 inhibitor for psoriasis Takeda is getting from Nimbus, along with the Hutchmed fruquintinib commercialization outside of China, are just two of what it reports are 10 late-stage development programs of promising candidates.

Regeneron CSO George Yancopoulos (L) and CEO Len Schleifer at a groundbreaking for its new Tarrytown, NY facility, June 2022 (Lev Radin/Pacific Press/LightRocket via Getty Images)

In show­down with Roche, Re­gen­eron gears up for po­ten­tial Eylea ex­pan­sion amid Covid de­cline

Regeneron faced a substantial slump in overall revenue last year, but the focus still remains on some of its biggest blockbusters.

The pharma with several high-profile partnerships — Sanofi and Bayer among them — said Friday that Q4 revenue was down 31% for the quarter, and down 24% for the entire year. However, that won’t stop blockbuster expansion plans.

One of those is Eylea, the Bayer-partnered eye disease drug that has been in major competition with Roche’s Vabysmo. While Eylea is currently only approved in a 2 mg dose, the company recently filed for approval to give a 8 mg dose, in hopes of making a longer-lasting treatment.