The next wave of drug discovery is being enabled by powerful computers dining on complex algorithms to uncover potential new scientific approaches for the development of innovative therapeutics.

This fact has not been lost on venture capital firms specializing in the health care space that are beginning to support emerging biopharma companies that are using artificial intelligence (AI) and machine learning (ML) to supercharge their drug discovery and development activities.

While it is still early days, over the past two years companies in this space have already attracted well in excess of $1 billion in venture capital.

In December 2018, Cambridge, Mass.-based Relay Therapeutics Inc. raised a whopping $400 million in a series C financing, a record amount for this stage of funding, that will support the expansion of the company's early stage discovery efforts, advance its existing oncology programs into the clinic and invest in broadening its computational platform and tools. According to president and CEO Sanjiv Patel, the company is at the nexus of increasing computing power and sophisticated experimental methods such as temperature X-ray crystallography and cryo-electron microscopy that allows the creation of high-definition images of a protein both in the normal and mutated state, which occurs in disease. This allows researchers to determine if there are any differences in the molecule's behavior. The company can visualize proteins in motion, the missing fourth dimension that opens the door to a powerful way of conducting drug discovery. Prior approaches to imaging proteins have been limited to static pictures.

Given this insight, it allows the company to design small molecules to bind to the protein to stabilize it back to its normal optimal confirmation. (See BioWorld, Dec. 21, 2018.)

The financing was led by the Softbank Vision Fund and included participation from additional new investors including Foresite Capital, Perceptive Advisors and Tavistock Group.

Focused on AI

Venture funds such as Softbank and Foresite, which closed its fourth and largest fund with $668 million in capital commitments in May 2018, have been in the forefront of supporting AI-driven companies. For example, both are investors in Pleasanton, Calif.-based 10X Genomics Inc., which has raised $243 million including $35 million in January as an extension of its series D financing led by Meritech Capital. The company, focused on accelerating genomic discovery, generated $50 million from its series D financing in May last year.

The funding has helped the company make two strategic acquisitions: Stockholm-based Spatial Transcriptomics, which is working in the emerging field of spatial genomics, technology that enables researchers to not only see what is in a cell but how cells are organized in relation to one another. This opens a field of possibilities within disease areas, such as oncology, neurology and immunology, as well as in the broader area of biology. 10x Genomics also acquired Menlo Park, Calif.-based Epinomics, which is working in the growing epigenetics space.

Accelerating pace

The pace of venture investments is certainly increasing. In July, Recursion Pharmaceuticals Inc. closed a $121 million series C financing round led by the Scottish Mortgage Investment Trust plc. (See BioWorld, July 16, 2019.)

The financing will support the build-out of the Salt Lake City-based company's machine learning-enabled drug discovery platform. It models thousands of diseases in human cells, capturing about 2 million new fluorescent micrograph images weekly across about 90,000 different mini-experiments, a process by which it is building one of the world's largest biological image datasets.

In June, San Francisco-based Blackthorn Therapeutics Inc., a clinical-stage, neurobehavioral health company that is developing AI technologies to advance targeted therapeutics, closed a $76 million series B financing round. (See BioWorld, June 14, 2019.)

The cash is expected to support a mood disorder program into phase II later this year and progress an autism-focused asset into the clinic.

The company reported, at the Kappa Therapeutics 2019 conference in March, positive phase I results supporting development of BTRX-335140, its selective kappa opioid receptor (KOR) antagonist, for neurobehavioral disorders. The compound exhibited favorable pharmacokinetics and was well-tolerated in healthy human subjects.

It also presented translational data generated with GEMINI-DOT, designed to identify genes expressed in brain circuits linked to behavioral symptoms. Using the technology, the company identified a robust correlation between expression of the KOR gene and a brain circuit involved in cognitive function. In a preclinical model, BTRX-335140 conferred resiliency to stress-induced cognitive performance deficits.

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