Atomwise co-founders Abe Heifets and Izhar Wallach (photo courtesy Atomwise)

Plot­ting to be the Bridge­Bio of AI, Atom­wise lands $123 mil­lion Se­ries B for hype-heavy plat­form

The PR-friend­ly, well-part­nered AI biotech that’s pro­voked stern skep­ti­cism in some sci­en­tif­ic cor­ners is get­ting a boat­load of new cash.

Atom­wise has an­nounced a $123 mil­lion Se­ries B round led by San­abil In­vest­ments — a sub­sidiary of the Sau­di roy­al fund — and B Cap­i­tal Group and joined by DCVC and Y Com­bi­na­tor, among oth­ers. The new round is near­ly triple what Atom­wise had raised pri­or and will go to­wards both scal­ing their mol­e­cule-hunt­ing soft­ware and build­ing the grow­ing net­work of spin­outs they’re launch­ing to de­vel­op some of the mol­e­cules that soft­ware has turned up.

The goal ul­ti­mate­ly, said CEO Abe Heifets, is to build a port­fo­lio of small­er biotechs be­neath theirs — a kind of Bridge­Bio for AI.

“We want to grow in scale,” Heifets told End­points News. “The tech­nol­o­gy is small mol­e­cule — that’s a very broad um­brel­la so there’s in­creas­ing­ly an in­ter­est in a port­fo­lio ap­proach”

The round could be a le­git­i­mat­ing one for Atom­wise, a com­pa­ny that over the last few years has found it­self at the cen­ter of a de­bate be­tween en­gi­neers who promised that ma­chine learn­ing and AI net­works could re­make drug de­vel­op­ment and sci­en­tists who saw a lot of buzz but lit­tle sub­stance. Since its days at Y Com­bi­na­tor, the com­pa­ny has promised to use an AI con­vo­lu­tion­al net­work to rapid­ly screen bil­lions of mol­e­cules for their abil­i­ty to hit a tar­get or bind to a pro­tein, and in do­ing so speed from “years to days” the process of se­lect­ing drug can­di­dates. In do­ing so, they said, they could cut short the ar­du­ous and ex­pen­sive drug de­vel­op­ment path.

The prob­lem, crit­ics such as sci­ence blog­ger and med­i­c­i­nal chemist Derek Lowe ar­gued, is that it just doesn’t take that long to screen mol­e­cules. It’s a bump in the drug dis­cov­ery moun­tain.

“You can do a mil­lion in six weeks. The whole com­pound screen­ing step is just an­oth­er ear­ly thing in pre­clin­i­cal space,” Lowe wrote in one piece that al­so not­ed Atom­wise’s “ten­den­cy to­ward over­state­ment.”

“I’ve nev­er seen a suc­cess­ful project in which it was a rate-lim­it­ing step. But ‘shave a few weeks off some­thing at the very be­gin­ning’ isn’t as com­pelling an of­fer, is it?” he said.

Though just one of many com­pa­nies now of­fer­ing rapid, AI-en­abled screen­ing, Atom­wise might be the most pro­lif­ic, claim­ing “over 750 re­search col­lab­o­ra­tions ad­dress­ing over 600 dis­ease tar­gets” and part­ner­ships with ma­jor phar­ma com­pa­nies, in­clud­ing Eli Lil­ly, Mer­ck, Ko­rea’s Han­soh Phar­ma­ceu­ti­cals, Bay­er and Bridge­Bio.

Yet it has ad­ver­tised those big-name part­ner­ships with par­tic­u­lar fan­fare. Rather than cal­cu­late the over­all po­ten­tial deal val­ue by up­front fees and mile­stones, as most biotechs do, they have of­ten list­ed val­ues that in­clude roy­al­ty es­ti­mates “based on his­tor­i­cal av­er­age rev­enues for small mol­e­cule drugs … with suc­cess in all projects” — in an in­dus­try where suc­cess is fleet­ing­ly rare. That’s al­lowed the com­pa­ny to ad­ver­tise that “Atom­wise has signed more than $5.5 bil­lion in to­tal deal val­ue with cor­po­rate part­ners to date” with­out dis­clos­ing any in­di­vid­ual pay­ments.

Heifets says that their deal re­leas­es are in line with how oth­er biotechs talk about their deals and what their part­ners are will­ing to dis­close. He al­so says Atom­wise pro­vides ben­e­fits be­yond that ini­tial screen­ing step.

“If you think of AI as on­ly be­ing ap­plied for high through­put screen­ing, then I agree with Derek,” he said. “That’s a be­gin­ning part and that’s pret­ty quick.”

Heifets said that Atom­wise al­so pro­vides ser­vices for lead op­ti­miza­tion, a longer and more dif­fi­cult step. And he said that they’ve shown the soft­ware can not on­ly find mol­e­cules faster but al­so find mol­e­cules for tar­gets that ma­jor com­pa­nies have spent years and mil­lions of dol­lars fail­ing to hit.

Most no­tably, Atom­wise launched X-37 last year in part around the dis­cov­ery of mol­e­cules that can bind to the PIM3 path­way with­out harm­ing healthy tis­sue, which Heifets said Roche, No­var­tis and As­traZeneca had tried and failed to do. The com­pa­ny raised $14.5 mil­lion in Se­ries A fund­ing. They al­so qui­et­ly launched Theia Bio­sciences around mol­e­cules that can hit the HTRA1 path­way and might be used to treat age-re­lat­ed mac­u­lar de­gen­er­a­tion.

Over the next few years, Heifets said, they plan to launch more biotech sub­sidiaries, hope­ful­ly even­tu­al­ly putting mul­ti­ple drugs in the clin­ic. If the mar­kets keep their his­toric pace, he said, an IPO could al­so be in their for­tunes.

That would like­ly mean a hefty S-1 and an­oth­er round of ar­gu­ments over the role of AI in biotech, and what’s hype and what’s re­al­i­ty.

“I think that will de­pend on what the mar­kets are do­ing,” Heifets said. “There have been a num­ber of very suc­cess­ful IPOs re­cent­ly in the biotech sec­tor, so it’s a very in­ter­est­ing time.”

Biogen CEO Michel Vounatsos (via Getty Images)

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The big biotech has turned to Sage Therapeutics for its latest deal, close to a year after the crushing failure of Sage-217, now dubbed zuranolone, in the MOUNTAIN study.

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Pascal Soriot (AP Images)

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On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

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Jason Kelly, Ginkgo Bioworks CEO (Kyle Grillot/Bloomberg via Getty Images)

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In mid-August, as Kodak’s $765 million government-backed push into drug manufacturing slowly fell apart in national headlines, Ginkgo Bioworks CEO Jason Kelly got a message from his company’s government liaison: HHS wanted to know if they, too, might want a loan.

The government’s decision to lend Kodak three quarters of a billion dollars raised eyebrows because Kodak had never made drugs before. But Ginkgo, while not a manufacturing company, had spent the last decade refining new ways to produce materials inside cells and building automated facilities across Boston.

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Michelle Longmire, Medable CEO (Jeff Rumans)

Med­able gets $91M for vir­tu­al clin­i­cal tri­als, bring­ing to­tal raise to $136M

As biotechs look to get clinical studies back on track amid the pandemic, Medable returned to the venture well for the second time this year, bagging a $91 million Series C to build out its virtual trial platform.

The software provider recently launched three new apps for decentralizing clinical trials, and saw a 500% revenue spike this year. And it isn’t alone. Back in August, Science 37 secured a $40 million round for its virtual trial tech, with support from Novartis, Sanofi Ventures and Amgen. Patients and researchers are taking a liking to the online approach, suggesting regulators could allow it to become a new normal even after the pandemic is over.

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The first time San Diego biotech Ambrx tried to go public in 2014, they failed and the company’s board switched to a radically different strategy: They sold themselves for an undisclosed amount to a syndicate of Chinese investors and pharma companies.

Now, after 5 quiet years, that syndicate has raised a mountain of cash and indicated they’ll soon make another bid to go public.

Earlier this month, Ambrx raised $200 million in what they billed as a crossover round financed by Fidelity, BlackRock, Cormorant Asset Management, HBM Healthcare Investments, Invus, Adage Capital Partners and Suvretta Capital Management. It’s the largest amount they’ve ever raised and, according to Crunchbase figures, more than doubles the total amount of VC capital collected since their launch 17 years ago.

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Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

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John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

UP­DAT­ED: Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

The FDA put out word today that the agency has approved its third drug, lumasiran, for primary hyperoxaluria type 1, better known as PH1. The news comes just 4 days after the European Commission took the lead in offering a green light.

An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

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Bob Nelsen (Photo by Michael Kovac/Getty Images)

Bob Nelsen rais­es $800M and re­cruits a star-stud­ded board to build the 'Fox­con­n' of biotech

Bob Nelsen spent his pandemic spring in his Seattle home, talking on the phone with Luciana Borio, the scientist who used to run pandemic preparedness on the National Security Council, and fuming with her about the dire state of American manufacturing.

Companies were rushing to develop vaccines and antibodies for the new virus, but even if they succeeded, there was no immediate supply chain or infrastructure to mass-produce them in a way that could make a dent in the outbreak.

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Peter Thiel (Riccardo Savi/Sipa via AP Images)

Tech bil­lion­aire Pe­ter Thiel backs a lead­ing psy­che­del­ic drug de­vel­op­er

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The C round — which includes a $32 million conversion of notes to equity — will fuel the development programs at ATAI Life Sciences, a Berlin-based biotech that has assembled a portfolio of companies with psychedelic and non-psychedilc approaches to depression, anxiety and addiction.

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