Chris Gibson, Recursion CEO (Vaughn Ridley/Sportsfile for Web Summit via Getty Images)

Re­cur­sion nabs $239M and an up to $1B part­ner­ship with Bay­er as AI race heats up

Some biotechs strug­gle for cash. Re­cur­sion, late­ly, seems to be swim­ming in it.

To­day, hav­ing al­ready raised over $180 mil­lion in the last two years, the Salt Lake City-based AI drug de­vel­op­er an­nounced a $239 mil­lion Se­ries D. That’s more than any US or Eu­ro­pean biotech has raised in a round this year and more than all but two biotechs raised last year. (Mab­well, a Shang­hai-based an­ti­body de­vel­op­er, raised $278 mil­lion in a Se­ries A in April.)

The round came with an im­por­tant point of val­i­da­tion for Re­cur­sion and a po­ten­tial long-term source of rev­enue: a new part­ner­ship with Bay­er. That deal, cen­tered on fi­brot­ic dis­eases, will pay Re­cur­sion $30 mil­lion up­front for the part­ner­ship, along with $100 mil­lion in mile­stones for each of up to 10 pro­grams the com­pa­nies could pur­sue. So it’s an up to $1 bil­lion deal, even if it’s van­ish­ing­ly un­like­ly to reach that. Leaps by Bay­er, the Ger­man phar­ma’s ven­ture arm, al­so led the Se­ries D, con­tribut­ing a $50 mil­lion eq­ui­ty in­vest­ment.

The in­vest­ment-part­ner­ship rep­re­sents one of the largest rounds, if not the sin­gle largest round, for an ar­ti­fi­cial-in­tel­li­gence fo­cused biotech and ce­ments Re­cur­sion as one of the ma­jor play­ers in a nascent field that has pro­duced many small star­tups but few heavy­weights. It al­so points to where Big Phar­ma and ma­jor VCs may spread their fo­cus as ma­chine learn­ing ap­proach­es ad­vance. The first small com­pa­nies to make head­lines and sign deals used ma­chine learn­ing to screen vast li­braries of mol­e­cules in search of ones that can hit tar­gets that drug com­pa­nies have long tried to hit. More re­cent­ly, though, a cou­ple up­starts have raised sig­nif­i­cant cash and scored promi­nent part­ner­ships us­ing ad­vanced com­pu­ta­tion­al tools to study cells more close­ly and come up with new tar­gets them­selves.

“What Re­cur­sion does is re­al­ly hard so I wouldn’t say there is go­ing to be a del­uge of com­pa­nies,” Zachary Bogue, founder of ear­ly Re­cur­sion backer DCVC, told End­points News. “But this idea of bi­ol­o­gy as a plat­form and us­ing AI as a drug dis­cov­ery is the new fron­tier in biotech.”

Rough­ly, that’s what Re­cur­sion does. In a 100,000 square-foot ware­house in down­town Salt Lake City, ro­bots take petri dish­es of dif­fer­ent cell types and knock out dif­fer­ent genes, tak­ing con­stant pic­tures in the process. Hu­mans can’t eas­i­ly tell the dif­fer­ence be­tween most of those pic­tures, but com­put­ers can, and with enough im­ages and hun­dreds of dif­fer­ent mea­sure­ments on each, they can pick up pat­terns to in­di­cate what can make a cell sick and which genes, when tar­get­ed, can make them healthy.  They can then iden­ti­fy and tweak mol­e­cules or com­pounds that hit those tar­gets.

So far, they’ve used that ap­proach to iden­ti­fy mol­e­cules to bring in­to clin­i­cal de­vel­op­ment for sev­er­al rare neu­ro­log­i­cal con­di­tions and hered­i­tary can­cer syn­drome, pulling com­pounds from Ohio State, Take­da, and co-founder Dean Li’s labs. But the com­pa­ny lists a bevy of pre­clin­i­cal dis­ease ar­eas on its pipeline, and Re­cur­sion CEO Chris Gib­son said that, with the Bay­er deal, they would be­gin to look to part­ner with big com­pa­nies where clin­i­cal de­vel­op­ment is more com­plex, such as in neu­rol­o­gy and on­col­o­gy.

“We’ve been talk­ing about this in­ter­nal­ly as the be­gin­ning of a sec­ond act for the com­pa­ny,” he said in an in­ter­view with End­points.

Oth­er com­pa­nies have scored large amounts of cap­i­tal with sim­i­lar ap­proach­es. Most no­tably, Daphne Koller’s start­up In­sitro has nabbed two $100 mil­lion-plus rounds in a span of 13 months, plus a Gilead col­lab­o­ra­tion on NASH. In Jan­u­ary, star Cana­di­an re­searcher Bren­dan Frey’s Deep Ge­nomics raised $40 mil­lion in­to the clin­ic. Mean­while, the rhetoric from the hand­ful of drug phar­ma ex­ec­u­tives who talk open­ly about ma­chine learn­ing, such as Glax­o­SmithK­line’s Hal Bar­ron, has cen­tered on ap­proach­es that help un­cov­er not just new mol­e­cules but al­so new tar­gets.

Un­der the deal with Bay­er, Re­cur­sion will use their sys­tem to build mod­els for dif­fer­ent fi­brot­ic dis­eases, fol­low­ing guid­ance from Bay­er fi­bro­sis ex­perts at the phar­ma. They will then use Bay­er’s li­brary of small mol­e­cules and their own in­ter­nal abil­i­ty to screen and de­vel­op mol­e­cules to come up with pre­clin­i­cal can­di­dates. Around that point, Gib­son said, they’ll hand things off to Ger­many.

Al­though Leaps by Bay­er de­scribed their $50 mil­lion con­tri­bu­tion to the Se­ries D as “our big bet in terms of dig­i­tal drug dis­cov­ery,” Bay­er it­self has al­so in­vest­ed in the mol­e­cule-screen­ing side of the AI biotech world, as have oth­er ma­jor com­pa­nies. In Jan­u­ary, Bay­er and the UK-based Ex­sci­en­tia signed a dis­cov­ery col­lab­o­ra­tion for up to €240 mil­lion. Ex­sci­en­tia has al­so teamed with Sum­it­o­mo, Sanofi and Cel­gene, the last of which in­clud­ed a $25 mil­lion up­front pay­ment. Atom­wise and In­sil­i­co have al­so signed mul­ti­ple big-name part­ner­ships, al­though they have been large­ly mile­stone-heavy, with lit­tle up­front dis­closed.

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As technology-enabled clinical research becomes the new normal, an integrated decentralized clinical trial operating system can ensure quality, deliver consistency and improve the patient experience.

The increasing availability of COVID-19 vaccines has many of us looking forward to a time when everyday things return to a state of normal. Schools and teachers are returning to classrooms, offices and small businesses are reopening, and there’s a palpable sense of optimism that the often-awkward adjustments we’ve all made personally and professionally in the last year are behind us, never to return. In the world of clinical research, however, some pandemic-necessitated adjustments are proving to be more than emergency stopgap measures to ensure trial continuity — and numerous decentralized clinical trial (DCT) tools and methodologies employed within the last year are likely here to stay as part of biopharma’s new normal.

Ron DePinho (file photo)

A 'fly­over' biotech launch­es in Texas with four Ron De­Pin­ho-found­ed com­pa­nies un­der its belt

In his 13 years at Genzyme, Michael Wyzga noticed something about East Coast drugmakers. Execs would often jet from Boston or New York to San Francisco to find more assets, and completely miss the work being done in flyover states, like Texas or Wisconsin.

“If it doesn’t come out of MGH or MIT or Harvard, probably not that interesting,” he said of the mindset.

Now, he and some well-known industry players are looking to change that, and they’ve reeled in just over $38 million to do it.

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Onno van de Stolpe, Galapagos CEO (Thierry Roge/Belga Mag/AFP via Getty Images)

Gala­pa­gos chops in­to their pipeline, drop­ping core fields and re­or­ga­niz­ing R&D as the BD team hunts for some­thing 'trans­for­ma­tive'

Just 5 months after Gilead gutted its rich partnership with Galapagos following a bitter setback at the FDA, the Belgian biotech is hunkering down and chopping the pipeline in an effort to conserve cash while their BD team pursues a mission to find a “transformative” deal for the company.

The filgotinib disaster didn’t warrant a mention as Galapagos laid out its Darwinian restructuring plans. Forced to make choices, the company is ditching its IPF molecule ’1205, while moving ahead with a Phase II IPF study for its chitinase inhibitor ’4617.

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Stéphane Bancel, Getty

Mod­er­na CEO brush­es off US sup­port for IP waiv­er, eyes more than $19B in Covid-19 vac­cine sales in 2021

Moderna is definitively more concerned with keeping pace with Pfizer in the race to vaccinate the world against Covid-19 than it is with Wednesday’s decision from the Biden administration to back an intellectual property waiver that aims to increase vaccine supplies worldwide.

In its first quarter earnings call on Thursday, Moderna CEO Stéphane Bancel shrugged off any suggestion that the newly US-backed intellectual property waiver would impact his company’s vaccine or bottom line. Still, the company’s stock price fell by about 9% in early morning trading.

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Eric Kelsic, Dyno Therapeutics CEO

Dyno's Er­ic Kel­sic fills the tank in his quest for bet­ter AAV with a group of big-name sup­port­ers on board

Adeno-associated viruses (AAV) for gene therapy have received a ton of scrutiny throughout the field’s history after a smattering of safety scares and their limited therapeutic range. Hoping to crack the field wide open through a capsid design revolution, Eric Kelsic and his team at Dyno have drummed up immense excitement — and now a hefty war chest.

Dyno Therapeutics has bagged a $100 million Series A with backing from the likes of round leader Andreessen Horowitz and new investor Casdin Capital in its quest to use AI to design better AAV capsids for gene therapy, the company said Thursday.

Joe Wiley, Amryt CEO

A biotech with a yen for pricey rare dis­ease drugs — and bar­gain base­ment shop­ping — adopts an­oth­er or­phan in lat­est M&A pact

After making it through a long, painful haul to get past a CRL and on to an FDA approval last summer, little Chiasma has found a buyer.

Amryt $AMYT, a company known for its appetite for acquiring expensive drugs for rare diseases at bargain prices, snagged Chiasma and its acromegaly drug Mycapssa (octreotide) capsules in an all-stock deal — with an exchange of 0.396 shares of Amryt for every share of Chiasma.

Ad­comm splits slight­ly in fa­vor of FDA ap­prov­ing Chemo­Cen­tryx’s rare dis­ease drug

The FDA’s Arthritis Advisory Committee on Thursday voted 10 for and 8 against the approval of ChemoCentryx’s $CCXI investigational drug avacopan as a treatment for adults with a rare and serious disease known as anti-neutrophil cytoplasmic autoantibody (ANCA)-vasculitis.

The vote on whether the FDA should approve the drug was preceded by a split vote of 9 to 9 on whether the efficacy data support approval, and 10 to 8 that the safety profile of avacopan is adequate enough to support approval.

Paul Hastings, Nkarta CEO

With no up­front pay­ment or mile­stones on the line, Nkar­ta and CRISPR join forces on CAR-NK search

Most deals in biotech come with hefty upfront payments attached, and the promise of big biobucks if a program works out. Not this one.

Nkarta has struck what CEO Paul Hastings calls a “real collaboration” with CRISPR Therapeutics to co-develop and commercialize two CAR-NK therapies, in addition to an NK+T program. The duo will split all R&D costs — and any worldwide profits — 50/50, Hastings said.

Gold­man Sachs jumps aboard Bain-backed 503(b) com­pound­ing phar­ma­cy with a $275M debt loan to sup­ply hos­pi­tals

Long the bane of the FDA’s existence, compounding pharmacies have seen a minor resurgence in the past year as short-term saviors for hospital drug shortages. Now, a 503(b) company specializing in hospital meds has earned a big backer to keep expanding its 200-drug strong portfolio.

Goldman Sachs and Owl Rock Capital Partners have doled out a $275 million debt loan to QuVa Pharma, a 503(b)-certified outsourcing facility providing compounded drugs to hospitals, the company said Thursday.