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.”

Late Fri­day ap­proval; Trio of biotechs wind down; Stem cell pi­o­neer finds new fron­tier; Biotech icon to re­tire; 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.

I hope your weekend is off to a nice start, wherever you are reading this email. As for me, I’m trying to catch the tail of the Lunar New Year festivities.

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Pfiz­er lays off em­ploy­ees at Cal­i­for­nia and Con­necti­cut sites

Pfizer has laid off employees at its La Jolla, CA, and Groton, CT sites, according to multiple LinkedIn posts from former employees.

The Big Pharma confirmed to Endpoints News it has let go of some employees, but a spokesperson declined to specify how many workers were impacted and the exact locations affected. Earlier this month, the drug developer had confirmed to Endpoints it was sharpening its focus and doing away with some early research on areas such as rare disease, oncology and gene therapies.

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Rodney Rietze, iVexSol CEO

Bris­tol My­ers, Charles Riv­er join Se­ries A fund­ing for iVex­Sol

Massachusetts-based iVexSol has secured funding to the tune of $23.8 million in its latest Series A round. The new investors include Bristol Myers Squibb, manufacturer Charles River Laboratories and Asahi Kasei Medical.

iVexSol is a manufacturer of lentiviral vectors (LVV), used in making gene therapies, and this latest round of fundraising brings its total Series A total over $39 million, which will be used to recruit more employees and bolster its technology.

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Jake Van Naarden, Loxo@Lilly CEO

Lil­ly en­ters ripe BTK field with quick FDA nod in man­tle cell lym­phoma

Eli Lilly has succeeded in its attempt to get the first non-covalent version of Bruton’s tyrosine kinase, or BTK, inhibitors to market, pushing it past rival Merck.

The FDA gave an accelerated nod to Lilly’s daily oral med, to be sold as Jaypirca, for patients with relapsed or refractory mantle cell lymphoma.

The agency’s green light, disclosed by the Indianapolis Big Pharma on Friday afternoon, catapults Lilly into a field dominated by covalent BTK inhibitors, which includes AbbVie and Johnson & Johnson’s Imbruvica, AstraZeneca’s Calquence and BeiGene’s Brukinsa.

Filip Dubovsky, Novavax CMO

No­vavax gets ready to take an­oth­er shot at Covid vac­cine mar­ket with next sea­son plans

While mRNA took center stage at yesterday’s FDA vaccine advisory committee meeting, Novavax announced its plans to deliver an updated protein-based vaccine based on new guidance.

Vaccines and Related Biological Products Advisory Committee (VRBPAC) members voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all future vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

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Eliot Forster, F-star CEO (Rachel Kiki for Endpoints News)

F-star gets down to the wire with $161M sale to Chi­nese buy­er as na­tion­al se­cu­ri­ty con­cerns linger

With the clock ticking on F-star Therapeutics’ takeover by a Chinese buyer, the companies are still scrambling to remove a hold on the deal from the US government’s Committee on Foreign Investment in the United States.

F-star and invoX Pharma said they are “actively negotiating” with CFIUS “about the terms of a mitigation agreement to address CFIUS’s concerns regarding potential national security risks posed by the transaction.”

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CBER Director Peter Marks (Susan Walsh/AP Images)

FDA ad­vi­so­ry com­mit­tee votes unan­i­mous­ly in fa­vor of bi­va­lent Covid shots re­plac­ing pri­ma­ry se­ries

The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted unanimously in favor of “harmonizing” Covid vaccine compositions, meaning all current vaccine recipients would receive a bivalent vaccine, regardless of whether they’ve gotten their primary series.

The vote marks an effort to clear up confusion around varying formulations and dosing schedules for current primary series and booster vaccines, as well as “get closer to the strains that are circulating,” according to committee member Paul Offit, professor of pediatrics at the Children’s Hospital of Philadelphia.

Elon Musk (GDA via AP Images)

Neu­ralink em­ploy­ees cite lay­offs at Elon Musk’s brain-com­put­er in­ter­face start­up

At least two Neuralink employees have posted to LinkedIn in recent days saying they’ve been laid off from Elon Musk’s brain-computer interface startup, which has received backlash for animal testing.

A former staffer working on preclinical study design and an ex-lab director working on assessing the safety of Neuralink’s implanted devices (prior to human testing) announced recently they’d been laid off, specifically using that terminology. Both had worked at the startup for at least two years.

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Ali Madani, Profluent founder and CEO

Proflu­ent de­buts to de­sign pro­teins with ma­chine learn­ing in bid to move past 'AI sprin­kled on top'

While OpenAI’s Microsoft-allied ChatGPT takes the world by storm, a fledgling startup in Berkeley, CA is debuting to take a similar language-learning model approach, but with the goal of designing new proteins.

Profluent, founded by a former Salesforce AI research leader, has secured $9 million to kick-start its work, with proceeds going toward building out an integrated wet lab and recruiting machine learning scientists and biologists. Insight Partners led the seed round. The investor base also includes Air Street Capital, AIX Ventures and Phoenix Venture Partners.

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