"Tech in Bio" Corner #1

This week let's review some of the recent advances in tech+bio, and several interesting companies and trends. Here's your essential recap: ?????????

Let's go!

In the Spotlight

?? Neuralink has successfully implanted its brain-computer interface in a second patient, allowing those with spinal cord injuries to control digital devices through thought alone. Elon Musk expects eight more patients to receive implants this year as part of ongoing clinical trials.

Watch my interview with Dr. Brian Jamieson, CTO of Diagnostic Biochips, were we talk about the opportunities and challenges of brain computer interfaces (BCI) technology, Neuralink, and the transformative potential of BCIs in neuroscience and pharmaceutical research: Ex-NASA Expert Unveils Everything You Need to Know About Brain-Computer Interfaces

?? Utah-based 'techbio' company Recursion acquired UK-based AI-drug discovery pioneer Exscientia in arguably the largest AI in bio deal so far.

Recursion Pharmaceuticals?(RXRX.O) has agreed to buy smaller rival Exscientia?(EXAI.O)?for $688 million in an all-stock deal, according to a statement seen by Reuters and further reported by BioPharmaTrend.com.

The deal is reflective of a larger pattern in the AI for drug discovery space, where a consolidation is ongoing with a small number of leading companies taking over smaller or financially troubled players with otherwise strong and innovative technological resources and know-how.

?? A busy couple of weeks for AI-driven company Insilico Medicine on two development fronts:

Firstly, Insilico Medicine's AI-designed TEAD inhibitor, ISM6331, received FDA IND approval and Orphan Drug Designation for mesothelioma, with plans to initiate U.S. clinical trials.

Previously, the company announced the launch of DORA, an AI assistant designed to help researchers draft medical papers, and introduced Precious-3 GPT, an open-source AI model for aging research. They also emphasized enhanced data privacy with their offline PandaOmics Box for secure data processing.

?? Roche is reportedly considering selling its health data subsidiary, Flatiron Health , which it acquired for $1.9 billion in 2018, due to strategic challenges.

Roche's ownership may have unintentionally limited Flatiron's ability to collaborate with other pharmaceutical companies, which has been a key source of its revenue—two-thirds of which comes from selling anonymized cancer patient data to pharma companies.

Despite its continued success of Flatiron in forming partnerships, these collaborations have increasingly involved academic and healthcare organizations rather than pharmaceutical companies, possibly diminishing the strategic value Roche initially sought from the acquisition.

R&D Corner

3D-Printed Blood Vessels Edge Us Closer to Artificial Organs (BiopharmaTrend)

Researchers at Harvard's Wyss Institute for Biologically Inspired Engineering and the John A. Paulson School of Engineering and Applied Science (SEAS) have made a leap in the quest to create artificial organs. Their latest innovation involves 3D printing complex vascular networks that mimic human blood vessels, bringing the reality of implantable human organs closer. The achievement is published in Advanced Materials.

In a reality check for the field, AI underwhelms in Leash Bio's binding contest: 'No one did well' (Endpoints News)

A protein binding contest run by Leash Bio revealed that current AI models struggle with predicting molecules that differ significantly from those they’ve seen before.

In an interview to Endpoints News , Leash Bio's CEO, Ian Quigley, PhD , highlighted that while AI is good at memorizing known data, it performs poorly at extrapolating into novel chemical spaces.

The contest results suggest that random selection of molecules might be as effective as the best models, pointing to limitations in AI’s ability to generalize. These findings raise questions about AI hype, the need for datasets that capture biological complexity, and appropriate benchmarks for AI performance. Leash Bio's strategy to overcome these challenges involves generating far more data, drawing parallels to the successes in chess and protein folding achieved through massive databases.

Quick Hits:

Roche Arguably Weighs Sale of Its Health Data Subsidiary Amid Strategic Challenges: A $1.9 Billion Gamble in Question

Novel AI Framework for Detecting LLM "Hallucinations" in Medical Summaries

Halda Therapeutics Secures $126 Million in Series B Extension to Advance RIPTAC Cancer Therapies

OpenFold Consortium Expands with Six New Members to Strengthen Open-Source AI Tools for Drug Discovery

Lantern Pharma Reports 86% Clinical Benefit in NSCLC Trial, Initial Patient Cohort

Novel AI Framework for Detecting LLM "Hallucinations" in Medical Summaries

23andMe Shifts Focus to Telehealth GLP-1 Prescriptions Amid Strategic Realignment

Persist AI and Nivagen Collaborate on AI-Enhanced Manufacturing for Long-Acting Injectables

Companies to Watch

Six AI-driven Drug Discovery Companies Enabling Precision Oncology

The article discusses how AI is revolutionizing precision oncology through the efforts of six notable companies.

Achilles Therapeutics plc utilizes its PELEUS platform to predict the most potent neoantigens for personalized cancer therapies.

ImmuneAI enhances cell-based immunotherapies with its advanced multiomics technology, exemplified by its work on CAR-NKT cells.

iBio, Inc. combines AI-based antibody optimization with mammalian display technology to develop novel CD3 T-cell binding antibodies.

Evaxion Biotech leverages its AI-Immunology? platform to develop personalized cancer vaccines, showing success in clinical trials for melanoma.

Lantern Pharma uses its RADR? platform to accelerate the development of oncology drugs, focusing on relapsed non-small cell lung cancer and lymphomas.

Finally, Predictive Oncology employs AI-driven platforms to predict tumor responses to drugs, supported by a vast biobank of human tumor samples, enhancing clinical trial success rates.

Upcoming Partner Events

11th Aging Research and Drug Discovery Meeting (#ARDD2024)

End of summer will be marked by a notable event, the 11th Aging Research and Drug Discovery Meeting (#ARDD2024), which is one of the leading conferences with a focus on aging research globally. Some of the well-known speakers in the aging/longevity field include David A. Sinclair A.O., Ph.D. Steve Horvath and Peter H. Diamandis to name a few.

I haven't been active in covering aging research (so far), but the conference will also feature stellar pharma and biotech tracks, with participation of Biogen, Eli Lilly, Novo Nordisk Foundation, and other top pharmas, my primary focus of interest.

Also, a big topic of this year's ARDD is XPRIZE Healthspan Team Summit, organized by the nonprofit XPRIZE Foundation -- a gathering of global experts focused on advancing solutions to extend healthy human lifespan, supported by a $101 million prize fund.

Takeaway of the Week

A wonderful and factually-rich report "Biotech financing: darkest before the dawn,” authored by Melanie Senior and published in Nature Biotechnology (2024), provides an in-depth analysis of the current state and future outlook of biotech funding.

You should definitely check out the report, here I am just summarizing briefly some takeaways I found most interesting:

1. Bifurcated market: There's a stark divide between "haves" and "have-nots" in biotech financing. Companies with clinical-stage assets, experienced management teams, or working in hot therapeutic areas are attracting outsized funding rounds, while early-stage companies struggle.
2. Larger financing rounds: The average private financing round in 2024 has reached almost $90 million, with at least 50 companies raising rounds worth $100 million or more. Series A rounds are particularly inflated, with an average of $80 million - more than double the average five years ago.
3. Therapeutic area focus: Obesity, neurology, and immunology are drawing significant investor interest. Companies like Metsera ($290 million seed and series A) and Hercules CM NewCo ($400 million) are capitalizing on the obesity gold rush led by Novo Nordisk's Wegovy and Eli Lilly's Zepbound.
4. Modality preferences: Antibody-drug conjugates (ADCs) and radioligand therapies (RLTs) are attracting substantial investments. Companies like Tubulis ($139 million) and Pheon Therapeutics ($120 million) have raised significant funds for ADC development. Conversely, cell and gene therapy (CGT) companies are facing challenges, with venture totals, number of financings, and average round sizes all declining steeply.
5. AI and machine learning impact: AI-driven companies are seeing strong investor interest. Xaira Therapeutics raised a $1 billion Series A round, while EvolutionaryScale secured a $142 million seed round. Overall, AI/ML companies in healthcare research and drug discovery are on track to raise more venture money in 2024 than in any previous year except 2021.
6. Geographic trends: European biopharma firms are projected to raise more venture funding in 2024 than in any previous year in the last decade and a half, except for 2021. However, Chinese biotech venture funding remains muted in 2024.
7. Corporate venture capital (CVC) role: CVCs like M Ventures, AbbVie Ventures, and Novo Ventures are playing an increasingly important role in supporting early-stage companies, particularly in Europe.
8. M&A activity: Significant M&A deals are shaping the landscape, such as AbbVie's $10 billion acquisition of ImmunoGen and Johnson & Johnson's $2 billion purchase of Ambrx, both in the ADC space.
9. Emerging technologies: Alongside AI, other innovative platforms gaining traction include Orbis Medicines' macrocycle-based technology and companies developing novel approaches in the RLT space.
10. Public market challenges: While private financing rounds are growing larger, public markets remain muted for biotech companies, with few IPOs in 2024. However, the total raised in the first half of 2024 already surpasses 2022 and 2023 figures.
11. The biotech financing landscape is showing clear preferences for certain modalities over others. Antibody-drug conjugates (ADCs) and radioligand therapies (RLTs) are attracting substantial investments, exemplified by Tubulis's $139 million raise and major acquisitions like Pfizer's $43 billion purchase of Seagen. Conversely, cell and gene therapies (CGT) are facing declining investor interest due to persistent clinical and manufacturing challenges. Meanwhile, AI-driven approaches in protein engineering and drug discovery, along with GLP-1 agonists for metabolic diseases, are seeing a surge in funding, as evidenced by EvolutionaryScale's $142 million seed round and the ongoing obesity gold rush led by Novo Nordisk and Eli Lilly.

Bonus Takeaway

The success of gene-editing technologies, such as CRISPR, heavily depends on the development of advanced drug delivery systems that can effectively target specific organs in vivo.

According to the insight from a LinkedIn post by Vincent Ling, and original source in STAT article "The race to build better CRISPR delivery vehicles is heating up," current delivery methods, like AAV and LNPs, face significant challenges, including off-target effects and potential toxicity at high doses.

This highlights the crucial, yet often overlooked, role of drug delivery sciences, a field culturally distinct from drug discovery. Innovative companies and labs, including Recode (lung-targeted LNPs), Broad/MIT (AAVs crossing the BBB), and Aera Therapeutics (endogenous virus-like particles), are leading efforts to overcome these barriers.

Despite the massive value created by genetic breakthroughs, there is a growing recognition of the complexities involved in creating a true therapeutic product.

The tide is turning on awareness of these challenges, as seen in the significant investments in delivery technology, such as the $193M raised by Aera Therapeutics.

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-- Andrii