Alex Zhavoronkov, Insilico CEO

With a new $255M megaround in hand, Alex Zha­voronkov has big plans for In­sil­i­co. Are they fea­si­ble?

If you take Alex Zha­voronkov at his word, it won’t be long un­til he rules over biotech’s AI drug dis­cov­ery are­na from atop his perch as In­sil­i­co CEO.

On the heels of a megaround an­nounced Tues­day morn­ing, the me­dia-savvy ex­ec out­lined a vi­sion of the not-so-dis­tant fu­ture where AI-fo­cused com­pa­nies crash and burn akin to the dot-com bub­ble in the ear­ly 2000s. Zha­voronkov likened the cur­rent en­vi­ron­ment to 1998, when there was a glut of biotechs that soaked up cap­i­tal but proved un­able to de­liv­er on their promis­es, he opined to End­points News.

Once that hap­pens, he claims, In­sil­i­co will be primed to emerge as the field’s Ama­zon or Google.

Zha­voronkov has made blus­tery claims be­fore, though, gen­er­at­ing con­tro­ver­sy back in 2019 with a pa­per claim­ing he “dis­cov­ered” a drug in just 21 days. And he’s far from alone in seek­ing to emerge as the win­ner of the first era of ma­chine learn­ing life sci­ence star­tups: Blue-chip biotech in­vestors such as GV, ARCH and Cas­din Cap­i­tal have thrown hun­dreds of mil­lions of dol­lars be­hind In­sitro and Re­cur­sion. Soft­Bank alone re­cent­ly wrote Ex­sci­en­tia a check for up to $300 mil­lion.

First, the nit­ty grit­ty of the raise: Zha­voronkov pulled in a huge $255 mil­lion Se­ries C for In­sil­i­co on Tues­day, by far the biotech’s biggest raise and more than 300% over­sub­scribed, he said. The funds will be used to push for­ward In­sil­i­co’s slate of 16 pre­clin­i­cal pro­grams, in­clud­ing its lead com­pound for id­io­path­ic pul­monary fi­bro­sis, which they will try to put in the clin­ic by the end of 2021.

As he has in the past, Zha­voronkov kept much of the prod­uct can­di­date in­for­ma­tion — things like drug tar­gets and in­di­ca­tions — close to the vest. In ad­di­tion to the fi­bro­sis lead, he said on­ly that “more than half” of the 16 pro­grams will be in on­col­o­gy, with In­sil­i­co al­so fo­cus­ing on meta­bol­ic dis­eases, im­munol­o­gy, CNS and Covid-19.

He de­clined fur­ther com­ment on whether the raise rep­re­sents a pre­cur­sor to an IPO, though he not­ed giv­en the size and in­vestors in­volved (Tues­day’s lead is War­burg Pin­cus, with no­table par­tic­i­pa­tion from Lil­ly Asia Ven­tures, Or­biMed and Deer­field) it would be “log­i­cal to as­sume” In­sil­i­co has plans for a po­ten­tial fu­ture ex­it.

But most of the ex­cite­ment dri­ving the mas­sive raise, Zha­voronkov says, has been the way In­sil­i­co has built out its oth­er ser­vices. Where­as bio­phar­mas tra­di­tion­al­ly pre­fer to keep their pre­clin­i­cal bi­ol­o­gy and chem­istry work in-house, In­sil­i­co has con­tract­ed out most of these ef­forts to about 80 CROs, the chief told End­points. It’s al­lowed for a “fric­tion­less” busi­ness mod­el where the biotechs can do many things all at once that big­ger com­pa­nies usu­al­ly per­form se­quen­tial­ly.

“It’s saved a lot of time, a lot of cost, and in­creased the prob­a­bil­i­ty of suc­cess,” he told End­points. “We don’t have to wait for one ex­per­i­ment to con­clude and we can do some in par­al­lel, and if it fails we’ll learn.”

On top of that, In­sil­i­co has start­ed sell­ing its soft­ware to oth­er phar­ma com­pa­nies and open­ing its dis­cov­ery plat­form up for an­nu­al sub­scrip­tions. Zha­voronkov says he prefers when oth­ers can uti­lize In­sil­i­co’s IP be­cause it helps bring more at­ten­tion to the AI space as a whole while de­moc­ra­tiz­ing R&D ca­pa­bil­i­ties.

If one were to in­dulge Zha­voronkov in his grandeur, he’d de­scribe how “dozens” of com­pa­nies are al­ready try­ing to copy how In­sil­i­co op­er­ates. There have been sev­er­al in­stances, he claims, of peo­ple at­tend­ing the biotech’s pre­sen­ta­tions sole­ly to take pic­tures of their slide decks. Rather than fret over los­ing com­pa­ny se­crets, Zha­voronkov says this is “a won­der­ful thing.”

There’s a reck­on­ing com­ing for the AI space, how­ev­er, that will like­ly re­sult in sig­nif­i­cant con­sol­i­da­tion, he says. As in­vestor ap­petite for the area has heat­ed up, it’s sud­den­ly be­come much eas­i­er to launch a com­pa­ny and raise lots of mon­ey, com­pared to where In­sil­i­co was sev­en years ago when Zha­voronkov got start­ed.

Where­as In­sil­i­co strug­gled to ini­tial­ly drum up cash, nowa­days there are peo­ple who have “just quit an in­ter­net firm and sud­den­ly get $100 mil­lion,” he says. It’s on­ly a mat­ter of time be­fore the bub­ble bursts, he added.

“Some com­pa­nies just start, get a huge amount of mon­ey, and what they start do­ing is they start hir­ing, they start in­flat­ing the salaries,” Zha­voronkov said. “And that’s a bad thing. At some point in time, it needs to cor­rect. The ques­tion here is when, and the ques­tion here is when will the less so­phis­ti­cat­ed in­vestors stop fund­ing this sec­tor.”

When­ev­er this hap­pens — Zha­voronkov es­ti­mates signs will start to ap­pear with­in the next 12 to 24 months — In­sil­i­co is prepar­ing to jump at some of the tal­ents that will end up on oth­er com­pa­nies’ chop­ping blocks. If Zha­voronkov has his way, the ten­drils he’s laid out will con­tin­ue to evolve and push in­to new sec­tors past just soft­ware of­fer­ings. In this way, he likens In­sil­i­co to Ama­zon, a com­pa­ny that has its hands in every­thing.

Whether or not this fu­ture comes true re­mains to be seen. It’s im­pos­si­ble to pre­dict how the mar­ket might move or re­act to any giv­en phe­nom­e­non. And de­spite the com­pa­ny’s promi­nence in the space, In­sil­i­co is still wait­ing on that first clin­i­cal tri­al.

But Zha­voronkov be­lieves he’s in po­si­tion to take ad­van­tage of what­ev­er might hap­pen.

“If the in­vestors want­ed us to just be­come a phar­ma com­pa­ny, I imag­ine I would not still be at the helm of the com­pa­ny,” Zha­voronkov said. “We want to have our AWS, and not just be a book­store. We’ll have our Prime and Prime En­ter­tain­ment, we need to branch out and be­come even big­ger to dom­i­nate. It can­not just end at the book­store.”

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

All about Omi­cron; We need more Covid an­tivi­rals; GSK snags Pfiz­er’s vac­cine ex­ec; Janet Wood­cock’s fu­ture at FDA; and more

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Lisa Deschamps, AviadoBio CEO

Ex-No­var­tis busi­ness head hops over to a gene ther­a­py start­up — and she's reeled in $80M for a dash to the clin­ic

Neurologist and King’s College London professor Christopher Shaw has been researching neurodegenerative diseases like ALS and collaborating with drugmakers for the last 25 years in the hopes of pushing new therapies forward. But unfortunately, none of those efforts have come anywhere close to fruition.

“So, you know, after 20 years in the game, I said, ‘Let’s try and do it ourselves,’” he told Endpoints News. 

Merck's new antiviral molnupiravir (Quality Stock Arts / Shutterstock)

As Omi­cron spread looms, oral an­tivi­rals ap­pear to be one of the best de­fens­es — now we just need more

After South African scientists reported a new Covid-19 variant — dubbed Omicron by the WHO — scientists became concerned about how effective vaccines and monoclonal antibodies might be against it, which has more than 30 mutations in the spike protein.

“I think it is super worrisome,” Dartmouth professor and Adagio co-founder and CEO Tillman Gerngross told Endpoints News this weekend. Moderna CEO Stéphane Bancel echoed similar concerns, telling the Financial Times that experts warned him, “This is not going to be good.”

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Radek Spisek, Sotio CEO (Cellestia)

A qui­et Czech biotech bags $315M to dri­ve its blos­som­ing can­cer pipeline through the clin­ic

In the rather insular world of biotech, most innovation inevitably comes from a cluster of R&D hubs — Cambridge, San Francisco, etc. But sometimes success stories sprout from rocky soil, which is most certainly the case with Prague-based Sotio Biotech and its suddenly jam-packed pipeline of cancer drugs.

After years in quiet development, Sotio now has $315 million in new funds to play with from parent company PPF Group, an investment group founded in the Czech Republic, as the biotech looks to advance its growing pipeline through early- and mid-stage trials.

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In­cor­po­rat­ing Ex­ter­nal Da­ta in­to Clin­i­cal Tri­als: Com­par­ing Dig­i­tal Twins to Ex­ter­nal Con­trol Arms

Most drug development professionals are familiar with the nerve-racking wait for the read-out of a large trial. If it’s negative, is the investigational therapy ineffective? Or could the failure result from an unforeseen flaw in the design or execution of the protocol, rather than a lack of efficacy? The team could spend weeks analyzing data, but a definitive answer may be elusive due to insufficient power for such analyses in the already completed trial. These problems are only made worse if the trial had lower enrollment, or higher dropout than expected due to an unanticipated event like COVID-19. And if a trial is negative, the next one is likely to be larger and more costly — if it happens at all.

Ab­b­Vie tacks on a new warn­ing to Rin­voq la­bel as safe­ty frets crimp JAK class

The safety problems that continue to plague the JAK class as new data highlight some severe side effects are casting a large shadow over AbbVie’s Rinvoq.

As a result of a recent readout highlighting major adverse cardiac events (MACE), malignancy, mortality and thrombosis with Xeljanz a couple of months ago, AbbVie put out a notice late Friday afternoon that it is adding the new class risks to its label for their rival drug.

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Biospec­i­men M&A: Dis­cov­ery ac­quires Al­bert Li's he­pa­to­cyte project; PhI­II tri­al on Bay­er's Nube­qa reached pri­ma­ry end­point

Discovery Life Sciences has acquired what claims to be the Maryland-based host of the world’s largest hepatocyte inventory, known as IVAL, to help researchers select more effective and safer drug candidates in the future.

The combined companies will now serve a wider range of drug research and development scientists, according to Albert Li, who founded IVAL in 2004 and is set to join the Discovery leadership team as the CSO of pharmacology and toxicology.

Pfiz­er, Am­gen and Janssen seek fur­ther clar­i­ty on FDA's new ben­e­fit-risk guid­ance

Three top biopharma companies are seeking more details from the FDA on how the agency conducts its benefit-risk assessments for new drugs and biologics.

While Pfizer, Amgen and Janssen praised the agency for further spelling out its thinking on the subject in a new draft guidance, including a discussion of patient experience data as part of the assessment, the companies said the FDA could’ve included more specifics in the 20-page draft document.

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