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.”

Adap­tive De­sign Meth­ods Of­fer Rapid, Seam­less Tran­si­tion Be­tween Study Phas­es in Rare Can­cer Tri­als

Rare cancers account for 22 percent of cancer diagnoses worldwide, yet there is no universally accepted definition for a “rare” cancer. Moreover, with the evolution of genomics and associated changes in categorizing tumors, some common cancers are now characterized into groups of rare cancers, each with a unique implication for patient management and therapy.

Adaptive designs, which allow for prospectively planned modifications to study design based on accumulating data from subjects in the trial, can be used to optimize rare oncology trials (see Figure 1). Adaptive design studies may include multiple cohorts and multiple tumor types. In addition, numerous adaptation methods may be used in a single trial and may facilitate a more rapid, seamless transition between study phases.

Marianne De Backer (L) and Jeff Hatfield

Bay­er nabs star biotech Vi­vid­ion with a $2B buy­out and an ‘arms-length’ pact, pulling a part­ner out of the IPO con­ga line

Vividion is canceling that IPO it filed. Instead of following the industry-wide migration to Nasdaq, the biotech that has captured considerable attention for its still-preclinical work finding cryptic pockets to bind to on proteins is going to work for Bayer now.

The pharma giant is putting out word today that it has bought out Vividion for $1.5 billion in cash and another half-billion dollars in milestones.

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Josh Hoffman, outgoing Zymergen CEO (Zymergen)

UP­DAT­ED: Syn­bio uni­corn Zymer­gen jet­ti­sons found­ing CEO, cuts guid­ance as cus­tomers re­port lead prod­uct does­n't work

Zymergen, just months off a $500 million IPO that put the synthetic bio firm in rarified air, has now ejected its founding CEO and downgraded its revenue forecasts after customers reported its lead film product doesn’t work as advertised, the company said Tuesday afternoon.

CEO Josh Hoffman will leave his role and sacrifice his board seat immediately in favor of Jay Flatley, the former CEO of Illumina who will take the lead role on an interim basis as the company conducts a search for its next leader.

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Zymergen co-founders Zach Serber, Josh Hoffman, and Jed Dean (Zymergen via website)

Zymer­gen's sud­den im­plo­sion shocked biotech. A lin­ger­ing loan could make things even worse

As former synbio unicorn Zymergen picks up the pieces from its spectacular implosion Tuesday, an outstanding loan from Perceptive Advisors — the only blue-chip biotech crossover investor to touch Zymergen’s fundraising efforts — could make the situation worse, according to public documents.

In December 2019, more than a year before Zymergen filed for what would eventually become a $500 million IPO, the “biofacturing” firm signed a $100 million credit facility with Perceptive to help supplement the nearly $700 million the company had raised across four VC rounds.

Bio­gen, Ei­sai are push­ing for an­oth­er ac­cel­er­at­ed Alzheimer's OK — this time for BAN2401

Now that the door at the FDA has been opened wide for Alzheimer’s drugs that can demonstrate a reduction in amyloid, Biogen and its partners at Eisai are pushing for a quick OK on the next drug to follow in the controversial path of aducanumab.

In a presentation to analysts, Eisai neurology chief Ivan Cheung outlined some bullish expectations for their newly-approved treatment and set the stage for what he believes will be a fast follow for BAN2401 (lecanemab) — after a dry spell in new drug development that’s lasted close to 20 years.

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Jeffrey Bluestone, Sonoma CEO (Photo credit: Steve Babuljak)

Jeff Blue­stone just raised $265M to de­vel­op cu­ra­tive cell ther­a­pies. We asked him how

Jeff Bluestone had some big goals in mind when he decided to make a switch from a decades-long career in academia and non-profit research to a biotech startup CEO. And now — 18 months after the $40 million launch party — he has a whole lot more money on hand to pay for the considerable amount of work ahead at Sonoma Biotherapeutics.

This morning Bluestone is taking the wraps off a $265 million B round after boosting the core syndicate of A-list investors he started with. Even by today’s standards, that sum dwarfs the kind of $100 million-plus megarounds that have become standard fare in biotech over the last 2 years.

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Paul Hudson, Sanofi CEO (Eric Piermont/AFP via Getty Images)

UP­DAT­ED: Sanofi buys mR­NA play­er Trans­late Bio for $3.2B. And the price fits a pop­u­lar range for biotech M&A

Sanofi CEO Paul Hudson is dead serious about his intention to vault directly into contention for the future of mRNA vaccines.

A year after paying Translate Bio $TBIO a whopping $425 million in an upfront and equity payment to help guide the pharma giant to the promised land of mRNA vaccines, Sanofi closed the deal with a buyout early Tuesday, spending $38 a share in a $3.2 billion buyout.

Translate’s stock $TBIO soared after the market closed Monday when Reuters reported the first word of the acquisition just hours ahead of the formal announcement. The wire service, though, didn’t have a price to report in its scoop, and investors chased the stock up 78% in the wild ride that followed. Once the price was announced, gains shriveled to 29% ahead of the bell.

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Matt Gline (L) and Pete Salzmann

UP­DAT­ED: Roivant bumps stake in Im­muno­vant with a $200M deal. But with M&A off the ta­ble, shares crater

Roivant has worked out a deal to pick up a chunk of stock in its majority-owned sub Immunovant $IMVT, but the stock buy falls far short of its much-discussed thoughts about buying out all of the 43% of shares it doesn’t already own.

Roivant, which recently inked a SPAC move to the market at a $7 billion-plus valuation, has forged a deal to boost its ownership in Immunovant by 6.3 points, ending with 63.8% of the biotech’s stock following a $200 million injection. That cash will bolster Immunovant’s cash reserves, giving it a $600 million war chest to fund a slate of late-stage studies for its big drug: the anti-FcRn antibody IMVT-1401.

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Tadataka Yamada (Photographer: Kiyoshi Ota/Bloomberg via Getty Images)

Sci­ence pi­o­neer, phar­ma re­search chief, glob­al health ad­vo­cate and biotech en­tre­pre­neur Tadata­ka ‘Tachi’ Ya­ma­da has died

Tadataka Yamada, a towering physician-scientist who made his name in academia before transforming drug development at GSK and developing vaccines for malaria and meningitis at the Gates Foundation, died unexpectedly of natural causes at his home in Seattle Wednesday morning.

He was 76. Frazier Venture Partner David Socks confirmed his death.

Known widely by the mononym “Tachi,” Yamada had a globetrotting career and arrived in industry relatively late in life. A 2004 Independent article noted GSK had asked Yamada to stay on beyond his approaching 60th birthday, the company’s usual retirement age. Yamada would continue working for the next 17 years, steering the Gates Foundation’s global health division for 6 years, funding Jim Wilson’s gene therapy work when few would touch it, launching Takeda Vaccines and co-founding a series of high-profile biotechs.