Generative AI advancements have swept through the tech landscape, prompting biotech investors to wager on similar computational methodologies revolutionizing drug discovery.
On Tuesday, ARCH Venture Partners and Foresite Labs, an affiliate of Foresite Capital, jointly announced the incubation and funding of Xaira Therapeutics with a staggering $1 billion.
This move comes after approximately six months of stealth operations. Notable investors in the venture include F-Prime, NEA, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, Menlo Ventures, Two Sigma Ventures, and SV Angel.
Marc Tessier-Lavigne, former Stanford president and chief scientific officer at Genentech, now serving as Xaira’s CEO, asserts the company’s readiness to embark on drug development previously deemed unattainable without recent AI breakthroughs. Tessier-Lavigne explained, “We’ve secured significant funding because we believe the technology has reached a pivotal moment where its impact on the field can be transformative.”
The groundbreaking foundational models stem from the University of Washington’s Institute of Protein Design, spearheaded by David Baker, a co-founder of Xaira. Unlike artistic diffusion models like OpenAI’s DALL-E and Midjourney, Baker’s models target the creation of molecular structures feasible in the physical world.
While Xaira’s investors foresee a revolution in data design, they acknowledge that generative AI applications in biology are still in their infancy. Vik Bajaj, CEO of Foresite Labs and managing director of Foresite Capital, noted the challenge of generating datasets crucial for model development in the data-scarce realms of biology and medicine.
Other biotech companies, such as Recursion and Genesis Therapeutics, are also leveraging generative AI for drug design, indicating a broader trend in the industry.
Although Xaira did not disclose a timeline for its first drug’s availability for human trials, ARCH Venture Partners managing director Bob Nelsen stressed the company’s and its investors’ commitment to long-term strategy and substantial investment requirements.
Xaira aims to establish itself as a frontrunner in AI-driven drug discovery, notwithstanding some skepticism surrounding the appointment of Tessier-Lavigne as CEO. His resignation from Stanford amidst allegations concerning his tenure at Genentech raised eyebrows. However, investors maintain confidence in Tessier-Lavigne’s integrity and leadership qualities, emphasizing his exoneration by Stanford and his extensive experience in scientific leadership roles.
