Advances in generative AI have taken the technology world by storm. Biotech investors are making a big bet that similar computational methods could revolutionize drug discovery.
On Tuesday, ARCH Venture Partners and Foresite Laboratoriessubsidiary of Foresite Capital, announced that they incubated Xaira Therapeutics and funded AI biotech with $1 billion. Other investors in the startup, which has been operating in stealth mode for about six months, include F-Prime, NEA, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, Menlo Ventures, Two Sigma Ventures and SV Angel.
Xaira CEO Marc Tessier-Lavigne, former president of Stanford and chief scientific officer at Genentech, says the company is ready to begin developing drugs that would be impossible to manufacture without recent advances in artificial intelligence. “We’ve made such a large capital raise because we believe the technology is at an inflection point where it can have a transformative effect on the field,” he said.
Advances in fundamental models come from the Institute for Protein Design at the University of Washington, led by David Baker, one of Xaira’s co-founders. These models are similar to the diffusion models that power imagers like DALL-E and OpenAI’s Midjourney. But rather than creating art, Baker’s models aim to design molecular structures that can be created in a three-dimensional physical world.
While Xaira investors are convinced the company can revolutionize data design, they emphasized that applications of generative AI in biology are still in the early stages.
Vik Bajaj, CEO of Foresite Labs and CEO of Foresite Capital, said that unlike technology, where the data that trains AI models is created by consumers, biology and medicine are “data poor.” . You have to create the data sets that drive model development.”
Other biotech companies using generative AI to design drugs include recursionwhich went public in 2021, and Genesis Therapeutics, a startup that last year raised a $200 million Series B co-led by Andreessen Horowitz.
The company declined to say when it expects to have its first drug available for human trials. However, ARCH Venture Partners CEO Bob Nelsen stressed that Xaira and its investors are prepared to play the long game.
“It takes billions of dollars to be a real pharmaceutical company and also think about AI. “They are both expensive disciplines,” he said.
Xaira wants to position itself as a powerhouse in AI drug discovery. However, some see the addition of Tessier-Lavigne as CEO as an unexpected move. Tessier-Lavigne resigned just seven months ago from her position as Stanford president after explosive reports, including in the Stanford Diary – that his lab at Genetech had manipulated research data.
Tessier-Lavigne was not accused of manipulating any data and denied knowing that his colleagues were publishing falsified research.
In fact, after a special committee of Stanford’s Board of Trustees launched a review of allegations of misconduct related to his scientific research and the articles he authored or co-authored, Tessier-Lavigne said the panel concluded that he “did not engage in any fraud or falsification of scientific data.” Furthermore, he wrote in In his last official communication from Stanford last summer, “While the report clearly refutes the allegations of fraud and misconduct made against me,” the investigation itself had become too much of a distraction, leading him to resign. “for the good of the University.” .”
In any case, investors do not seem concerned about the events. They say they are confident that Tessier-Lavigne, who left Genentech in 2011 to run Rockefeller University and then joined Stanford in 2016, is the right person for the job.
“I have known Marc for many years and know him to be a person of integrity and scientific vision who will be an exceptional CEO,” Nelsen said in an email. “Stanford cleared him of any crime or scientific misconduct.”