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.”

A new era of treat­ment: How bio­mark­ers are chang­ing the way we think about can­cer

AJ Patel was recovering from a complicated brain surgery when his oncologist burst into the hospital room yelling, “I’ve got some really great news for you!”

For two years, Patel had been going from doctor to doctor trying to diagnose his wheezing, only to be dealt the devastating news that he had stage IV lung cancer and only six months to live. And then they found the brain tumors.

“What are you talking about?” Patel asked. He had never seen an oncologist so happy.

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ProFound Therapeutics founding team

Flag­ship's lat­est biotech could turn some of the thou­sands of new pro­teins it dis­cov­ered in­to ther­a­pies — and it has $75M to start

Flagship Pioneering, the incubator of Moderna and dozens of other biotechs, says it has landed upon tens of thousands of previously undiscovered human proteins. The VC shop wants to potentially turn them into therapeutics.

Like other drug developers that have turned proteins into therapeutics (think insulin for diabetes), Flagship’s latest creation, ProFound Therapeutics, wants to tap into this new trove of proteins as part of its mission to treat indications ranging from rare diseases to cancer to immunological diseases.

Richard Silverman, Akava Therapeutics founder and Northwestern professor

This time around, Lyri­ca's in­ven­tor is de­vel­op­ing his North­west­ern dis­cov­er­ies at his own biotech

Richard Silverman was left in the dark for the last five years of clinical development of the drug he discovered. The Northwestern University professor found out about the first approval of Lyrica, in the last few days of 2004, like most other people: in the newspaper.

What became one of Pfizer’s top-selling meds, at $5 billion in 2017 global sales before losing patent protection in 2019, started slipping out of his hands when Northwestern licensed it out to Parke-Davis, one of two biotechs that showed interest in developing the drug in the pre-email days, when the university’s two-person tech transfer team had to ship out letters to garner industry appetite.

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David Ricks, Eli Lilly CEO (David Paul Morris/Bloomberg via Getty Images)

Eli Lil­ly set to in­vest $2.1B in home state man­u­fac­tur­ing boost

Eli Lilly is looking to expand its footprint in its home Hoosier State by making a major investment in manufacturing.

The pharma is investing $2.1 billion in two new manufacturing sites at Indiana’s LEAP Lebanon Innovation and Research District in Boone County, northwest of Lilly’s headquarters in Indianapolis.

The two new facilities will expand Lilly’s manufacturing network for active ingredients and new therapeutic modalities, including genetic medicines, according to a press release.

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Up­dat­ed: US sees spike in Paxlovid us­age as Mer­ck­'s mol­nupi­ravir and As­traZeneca's Evusheld are slow­er off the shelf

New data from HHS show that more than 162,000 courses of Pfizer’s Covid-19 antiviral Paxlovid were administered across the US over the past week, continuing a streak of increased usage of the pill, and signaling not only rising case numbers but more awareness of how to access it.

In comparison to this week, about 670,000 courses of the Pfizer pill have been administered across the first five months since Paxlovid has been on the US market, averaging about 33,000 courses administered per week in that time.

Pfiz­er and CD­MOs ramp up Paxlovid man­u­fac­tur­ing with Kala­ma­zoo plant ex­pan­sion lead­ing the way

As the Covid-19 pandemic continues to evolve, pharma companies and manufacturers are exploring how to step up production on antivirals.

Pfizer is planning to expand its Kalamazoo-area facility to increase manufacturing capabilities for the oral Covid-19 antiviral Paxlovid, according to a report from Michigan-based news site MLive. The expansion of the facility, which serves as Pfizer’s largest manufacturing location, is expected to create hundreds of “high-skilled” STEM jobs, MLive reported. No details about the project’s cost and timeline have been released, but according to MLive, Pfizer will announce the details of the expansion at some point in early June.

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FDA spells out the rules and re­stric­tions for states seek­ing to im­port drugs from Cana­da

The FDA is offering more of an explanation of the guardrails around its program that may soon allow states to import prescription drugs in some select circumstances from Canada, but only if such imports will result in significant cost reductions for consumers.

While the agency has yet to sign off on any of the 5 state plans in the works so far, and PhRMA’s suit to block the Trump-era rule allowing such imports is stalled, the new Q&A guidance spells out the various restrictions that states will have to abide by, potentially signaling that a state approval is coming.

Simba Gill, CEO of Evelo Biosciences

While down 87% YOY, Evelo gets Flag­ship and oth­ers to in­fuse new cap­i­tal for come­back hope

Just four years after Flagship spinout Evelo Biosciences went public in an IPO worth $85 million, the biotech has seen its share price tank from $13 a share this time last year (ultimately reaching a peak of over $17) to now under $1.50. And today, it looks like Flagship still thinks the fledging biotech, in a down market, is still worth something after initial pre-IPO backing from the likes of Google’s GV, Celgene, Mayo Clinic and Alexandria Venture.

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Peter Thompson, Terremoto Biosciences interim CEO

For­mer Prin­cip­ia team looks to shake up co­va­lent small mol­e­cules again, this time at 'earthquake' scale

Terremoto Biosciences goes back a long ways, in a sense, to about a dozen years ago when Principia Biopharma was founded by UCSF professor Jack Taunton. Peter Thompson initially helmed the biotech.

The company helped expand covalent small molecule inhibitors beyond oncology and into autoimmune disease by targeting cystine. But that amino acid is uncommon in a lot of proteins, offering fewer drug targets than, say, lysine, which is present in most proteins of interest. So, over the years, Taunton went back to the drawing board to check out that second amino acid.

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