Andrew Hopkins, Exscientia CEO

The cash won't stop for Ex­sci­en­tia as it makes a $300M+ Nas­daq de­but

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An AI biotech with lit­tle hu­man da­ta — but lots of hype — is once again drown­ing in cash.

Ex­sci­en­tia priced its IPO late Thurs­day evening, an­nounc­ing it pulled in $304.7 mil­lion with the raise. The pub­lic de­but marks Ex­sci­en­tia’s third nine-fig­ure raise of the year, af­ter the biotech ex­pand­ed its Se­ries C to $100 mil­lion in March and raised more than half a bil­lion dol­lars in a pair of fi­nanc­ings in April. Ex­sci­en­tia shares will be­gin trad­ing Fri­day at $22 apiece un­der the tick­er $EX­AI.

Thurs­day, too, saw Ex­sci­en­tia raise more than just the IPO. In con­junc­tion with the pric­ing, the Ox­ford, UK-based biotech got an­oth­er $160 mil­lion in pri­vate place­ments from Soft­Bank and the Bill and Melin­da Gates Foun­da­tion.

With the de­but, de­tails about the big IPO win­ners are com­ing in­to fo­cus. The biggest share­hold­er is now Soft­Bank, which will get a 16.3% stake af­ter the of­fer­ing. CEO An­drew Hop­kins is sec­ond on the list with 15.8% of shares.

But al­so no­table are the stakes from Evotec, No­vo Hold­ings and Bris­tol My­ers Squibb. Evotec and No­vo will each get about 11-12% of shares when the of­fer­ing clos­es, and Bris­tol My­ers is cash­ing in on an old Cel­gene deal with a 4.7% stake. The Big Phar­ma ex­pand­ed a Cel­gene-era deal with Ex­sci­en­tia ear­li­er this year, promis­ing up to $1.2 bil­lion in mile­stones in May.

The biotech has re­mained busy at the deal­mak­ing ta­ble. Ex­sci­en­tia fol­lowed that up with a small ac­qui­si­tion for the mol­e­cule-screen­ing biotech All­cyte in June — us­ing Soft­Bank’s cash — and less than two weeks lat­er joined forces with EQRx.

AI-fo­cused biotechs have proven large­ly suc­cess­ful at lur­ing in­vestors with bold promis­es about their tech­nol­o­gy, with Ex­sci­en­tia’s ef­forts at the fore­front. The com­pa­ny has promised to cut down on the lengthy drug de­vel­op­ment process by months, if not years, and is join­ing one of its main com­peti­tors on Nas­daq in Re­cur­sion Phar­ma­ceu­ti­cals.

Re­cur­sion’s IPO came in a bit larg­er at $436.4 mil­lion, but both com­pa­nies claimed to plant the im­por­tant AI mile­stone flag — be­ing the first biotech to put an AI-de­vel­oped drug in­to the clin­ic. Re­cur­sion did so in Ju­ly 2019, though the biotech has said the pro­gram came out of Dean Li’s old lab be­fore he joined Mer­ck.

Ex­sci­en­tia, mean­while, made its claim in Jan­u­ary 2020 with a can­di­date de­vel­oped in part­ner­ship with Sum­it­o­mo Dainip­pon. The pro­gram emerged af­ter the pair syn­the­sized 350 com­pounds and test­ed them in a lab be­fore de­cid­ing on one to move for­ward. But re­gard­less of which biotech is re­al­ly the first to de­vel­op a drug with AI, both con­tin­ue to at­tract sig­nif­i­cant in­vest­ment and part­ner­ships.

Al­so wait­ing in the IPO wings is the ma­chine learn­ing biotech in­sitro, which hasn’t an­nounced plans to go pub­lic just yet but raked in $400 mil­lion in a Se­ries C this past March. Ex­sci­en­tia plans to spend be­tween $50 mil­lion and $75 mil­lion on push­ing its plat­form for­ward, with an­oth­er $25 mil­lion to $50 mil­lion slat­ed to com­plete a Phase I study for EXS21546.

As the cal­en­dar turns to the fourth quar­ter Fri­day, the biotech IPO mar­ket is be­gin­ning to stir once again. Ex­sci­en­tia’s de­but pushed the to­tal com­bined raise past $13.5 bil­lion, per the End­points News tal­ly, and the in­dus­try re­mains on pace to eclipse 2020’s record raise of $16.5 bil­lion. But af­ter a sum­mer slow­down, the race will like­ly come down to the wire.

Clar­i­fi­ca­tion: This ar­ti­cle has been clar­i­fied to more ac­cu­rate­ly re­flect the na­ture of Soft­Bank’s stake in Ex­sci­en­tia. Soft­Bank con­trols the shares, not part­ner Joanne Xu.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Alaa Halawaa, executive director at Mubadala’s US venture group

The ven­ture crew at Mubadala are up­ping their biotech cre­ation game, tak­ing care­ful aim at a new fron­tier in drug de­vel­op­ment

It started with a cup of coffee and a slow burning desire to go early and long in the biotech creation business.

Wrapping up a 15-year discovery stint at Genentech back in the summer of 2021, Rami Hannoush was treated to a caffeine-fueled review of the latest work UCSF’s Jim Wells had been doing on protein degradation — one of the hottest fields in drug development.

“Jim and I have known each other for the past 15 years through Genentech collaborations. We met over coffee, and he was telling me about this concept of the company that he was thinking of,” says Hannoush. “And I got immediately intrigued by it because I knew that this could open up a big space in terms of adding a new modality in drug discovery that is desperately needed in pharma.”

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Flare Therapeutics biochemists Yong Li (L) and Valerie Vivat

A $123M Flare will get Third Rock on­col­o­gy biotech in­to the clin­ic this year

Flare Therapeutics will start its first human trial this year with an investigational urothelial cancer drug after pulling together a $123 million Series B from Big Pharmas, VCs and its incubator, Third Rock Ventures.

Launched in 2021 on the idea that a biotech could finally succeed at drugging the much-sought-after but stubborn transcription factor, Flare Therapeutics said Wednesday it is now primed for the clinic after closing its large financing haul earlier this year. The raise is a relatively stark figure in a tough startup financing environment but further buoys the upbeat signals coming out of other Third Rock biotechs in recent weeks, including the $200 million CARGO Therapeutics and $100 million Rapport Therapeutics rounds.

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Rohan Palekar, 89bio CEO

89bio’s PhII da­ta add to quick suc­ces­sion of NASH read­outs as field seeks turn­around

89bio said its drug was better than placebo at lessening fibrosis without worsening nonalcoholic steatohepatitis, or NASH, in two of three dose groups.

The San Francisco biotech said it thinks the Phase IIb data pave the way for a potential Phase III, following in the footsteps of another biotech in its drug class, Akero Therapeutics. To fund a late-stage study, CEO Rohan Palekar told Endpoints News 89bio “would need to raise additional capital,” with the company having about $188 million at the end of last year.

Francesco Marincola, newly-appointed Sonata Therapeutics CSO

Kite's head of re­search leaves for Flag­ship start­up Sonata

Another leader is departing Kite Pharma, and will to spend the “last part” of his career exploring how cancer evades the immune system.

Kite’s senior VP and global head of cell therapy research Francesco Marincola left the Gilead CAR-T unit last week for Sonata Therapeutics. Flagship last May unveiled the startup, which was pieced together from two fledgling biotechs Inzen and Cygnal Therapeutics. As CSO, Marincola will lead Sonata’s push to reprogram cancer cells to make them more immunogenic.

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FDA in­di­cates will­ing­ness to ap­prove Bio­gen ALS drug de­spite failed PhI­II study

Ahead of Wednesday’s advisory committee hearing to discuss Biogen’s ALS drug tofersen, the FDA appeared open to approving the drug, newly released briefing documents show.

Citing the need for flexibility in a devastating disease like ALS, regulators signaled a willingness to consider greenlighting tofersen based on its effect on a certain protein associated with ALS despite a failed pivotal trial. The documents come after regulatory flexibility was part of the same rationale the agency expressed when approving an ALS drug last September from Amylyx Pharmaceuticals, indicating the FDA’s openness to approving new treatments for the disease.

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Roche and Lil­ly team up to de­vel­op blood test to de­tect ear­ly signs of Alzheimer's

Eli Lilly is teaming up with Roche to help develop a blood test to detect early signs of Alzheimer’s disease and determine whether a patient should go for further confirmatory testing.

Roche’s Elecsys Amyloid Plasma Panel (EAPP) measures pTau 181 protein assay and APOE E4 assay in human blood plasma – elevations in pTau 181 are present in the early stages of Alzheimer’s, while the presence of APO E4 is the most common genetic risk factor for the disease.

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Josep Bassaganya-Riera, NImmune Biopharma

Ex­clu­sive: Af­ter get­ting his drug back, Lan­dos founder as­sem­bles new start­up for the big PhI­II test

By the time Josep Bassaganya-Riera stepped down as founding CEO of Landos Biopharma in 2021, the company had racked up Phase II data for its top autoimmune program, completed what he called a positive end-of-Phase-II meeting with the FDA and plans to launch pivotal Phase III trials.

Since then, though, the new leaders at Landos have reshuffled their plans for the drug, omilancor, first announcing they will run a Phase IIb ahead of a Phase III and eventually shelving it altogether.

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NIH re­jects an­oth­er at­tempt to 'march-in' on Astel­las' prostate can­cer drug over ex­ces­sive price

The National Institutes of Health has again declined to use so-called “march-in” rights to lower the price of Astellas and Pfizer’s prostate cancer drug Xtandi despite being invented at UCLA with grants from the US Army and NIH.

“Given the remaining patent life and the lengthy administrative process involved for a march-in proceeding, NIH does not believe that use of the march-in authority would be an effective means of lowering the price of the drug,” NIH told prostate cancer patients Robert Sachs and Clare Love, in a letter shared with Endpoints News. The institutes’ analyses found Xtandi “to be widely available to the public,” an indication that there was not a pressing need for the US to act.