drug discovery
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The global pandemic has heightened our understanding and sense of importance of our own health and the fragility of healthcare systems around the world. We’ve all come to realize how archaic many of our health processes are, and that, if we really want to, we can move at lightning speed. This is already leading to a massive acceleration in both the investment and application of artificial intelligence in the health and medical ecosystems.
Modern medicine in the 20th century benefited from unprecedented scientific breakthroughs, resulting in improvements in every aspect of healthcare. As a result, human life expectancy increased from 31 years in 1900 to 72 years in 2017. Today, I believe we are on the cusp of another healthcare revolution — one driven by artificial intelligence (AI). Advances in AI will usher in the era of modern medicine in truth.
Over the coming decades, we can expect medical diagnosis to evolve from an AI tool that provides analysis of options to an AI assistant that recommends treatments.
The healthcare sector is seeing massive digitization of everything from patient records and radiology data to wearable computing and multiomics. This will redefine healthcare as a data-driven industry, and when that happens, it will leverage the power of AI — its ability to continuously improve with more data.
When there is enough data, AI can do a much more accurate job of diagnosis and treatment than human doctors by absorbing and checking billions of cases and outcomes. AI can take into account everyone’s data to personalize treatment accordingly, or keep up with a massive number of new drugs, treatments and studies. Doing all of this well is beyond human capabilities.
I anticipate diagnostic AI will surpass all but the best doctors in the next 20 years. Studies have shown that AI trained on sizable data can outperform physicians in several areas of medical diagnosis regarding brain tumors, eye disease, breast cancer, skin cancer and lung cancer. Further trials are needed, but as these technologies are deployed and more data is gathered, the AI stands to outclass doctors.
We will eventually see diagnostic AI for general practitioners, one disease at a time, to gradually cover all diagnoses. Over time, AI may become capable of acting as your general practitioner or family doctor.
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Drug discovery is a large and growing field, encompassing both ambitious startups and billion-dollar Big Pharma incumbents. Engine Biosciences is one of the former, a Singaporean outfit with an expert founding crew and a different approach to the business of finding new therapeutics, and it just raised $43 million to keep growing.
Digital drug discovery in general means large-scale analysis of biological data like genes, gene expression, protein structures, binding sites, things like that. Where it has hit a wall in the past is not on the digital side, where any number of likely molecules or processes can be generated, but on the next step, when those notions need to be tested in vitro. So a new crop of biotech companies have worked to integrate these aspects.
Engine does so with a pair of tools it has dubbed NetMAPPR and CombiGEM. NetMAPPR is a huge sort of search engine for genes and gene interactions, taking special note of “errors” that could provide a foothold for a molecule or treatment. CombiGEM is like a mass genetic testing process that can look into thousands of gene combinations and edits on diseased cells simultaneously, providing quick experimental confirmation of the targets and effects proposed by the digital side. The company is focused on anti-cancer drugs but is looking into other fields as they become viable.
The focus on gene interactions sets their approach apart, said co-founder and CEO Jeffrey Lu.
“Gene interactions are relevant to all diseases, and in cancers, where we focus, a proven approach for effective precision medicines,” he explained. “For example, there are four approved drugs targeting the PARP enzyme in the context of mutation in the BRCA gene that is changing cancer treatment for millions of people. The fundamental principle of this precision medicine is based on understanding the gene interaction between BRCA and PARP.”
The company raised a $10 million seed in 2018 and has been doing its thing ever since — but it needs more money if it’s going to bring some of these things to market.
“We already have chemical compounds directed toward the novel biology we have uncovered,” said Lu. “These are effectively prototype drugs, which are showing anti-cancer effects in diseased cells. We need to refine and optimize these prototypes to a suitable candidate to enter the clinic for testing in humans.”
Right now they’re working with other companies to do the next step up from automated testing, which is to say animal testing, to clear the way for human trials.
The CombiGEM experiments — hundreds of thousands of them — produce a large amount of data as well, and they’re sharing and collaborating on that front with several medical centers throughout Asia. “We have built what we believe to be the largest data compendium related to gene interactions in the context of cancer disease relevance,” said Lu, adding that this is crucial to the success of the machine learning algorithms they employ to predict biological processes.
The $43 million round was led by Polaris Partners, with participation by newcomers Invus and a long list of existing investors. The money will go toward the requisite testing and paperwork involved in bringing a new drug to market based on promising leads.
“We have small molecule compounds for our lead cancer programs with data from in vitro (in cancer cells) experiments. We are refining the chemistry and expanding studies this year,” said Lu. “Next year, we anticipate having our first drug candidate enter the late preclinical phase of development and regulatory work for an IND (investigational new drug) filing with the FDA, and starting the clinical trials in 2023.”
It’s a long road to human trials, let alone widespread use, but that’s the risk any drug discovery startup takes. The carrot dangling in front of them is not just the possibility of a product that could generate billions in income, but perhaps save the lives of countless cancer patients awaiting novel therapies.
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Sensor data from smartphones and wearables can meaningfully predict an individual’s ‘biological age’ and resilience to stress, according to Gero AI.
The ‘longevity’ startup — which condenses its mission to the pithy goal of “hacking complex diseases and aging with Gero AI” — has developed an AI model to predict morbidity risk using ‘digital biomarkers’ that are based on identifying patterns in step-counter sensor data which tracks mobile users’ physical activity.
A simple measure of ‘steps’ isn’t nuanced enough on its own to predict individual health, is the contention. Gero’s AI has been trained on large amounts of biological data to spots patterns that can be linked to morbidity risk. It also measures how quickly a personal recovers from a biological stress — another biomarker that’s been linked to lifespan; i.e. the faster the body recovers from stress, the better the individual’s overall health prognosis.
A research paper Gero has had published in the peer-reviewed biomedical journal Aging explains how it trained deep neural networks to predict morbidity risk from mobile device sensor data — and was able to demonstrate that its biological age acceleration model was comparable to models based on blood test results.
Another paper, due to be published in the journal Nature Communications later this month, will go into detail on its device-derived measurement of biological resilience.
The Singapore-based startup, which has research roots in Russia — founded back in 2015 by a Russian scientist with a background in theoretical physics — has raised a total of $5 million in seed funding to date (in two tranches).
Backers come from both the biotech and the AI fields, per co-founder Peter Fedichev. Its investors include Belarus-based AI-focused early stage fund, Bulba Ventures (Yury Melnichek). On the pharma side, it has backing from some (unnamed) private individuals with links to Russian drug development firm, Valenta. (The pharma company itself is not an investor).
Fedichev is a theoretical physicist by training who, after his PhD and some ten years in academia, moved into biotech to work on molecular modelling and machine learning for drug discovery — where he got interested in the problem of ageing and decided to start the company.
As well as conducting its own biological research into longevity (studying mice and nematodes), it’s focused on developing an AI model for predicting the biological age and resilience to stress of humans — via sensor data captured by mobile devices.
“Health of course is much more than one number,” emphasizes Fedichev. “We should not have illusions about that. But if you are going to condense human health to one number then, for a lot of people, the biological age is the best number. It tells you — essentially — how toxic is your lifestyle… The more biological age you have relative to your chronological age years — that’s called biological acceleration — the more are your chances to get chronic disease, to get seasonal infectious diseases or also develop complications from those seasonal diseases.”
Gero has recently launched a (paid, for now) API, called GeroSense, that’s aimed at health and fitness apps so they can tap up its AI modelling to offer their users an individual assessment of biological age and resilience (aka recovery rate from stress back to that individual’s baseline).
Early partners are other longevity-focused companies, AgelessRx and Humanity Inc. But the idea is to get the model widely embedded into fitness apps where it will be able to send a steady stream of longitudinal activity data back to Gero, to further feed its AI’s predictive capabilities and support the wider research mission — where it hopes to progress anti-ageing drug discovery, working in partnerships with pharmaceutical companies.
The carrot for the fitness providers to embed the API is to offer their users a fun and potentially valuable feature: A personalized health measurement so they can track positive (or negative) biological changes — helping them quantify the value of whatever fitness service they’re using.
“Every health and wellness provider — maybe even a gym — can put into their app for example… and this thing can rank all their classes in the gym, all their systems in the gym, for their value for different kinds of users,” explains Fedichev.
“We developed these capabilities because we need to understand how ageing works in humans, not in mice. Once we developed it we’re using it in our sophisticated genetic research in order to find genes — we are testing them in the laboratory — but, this technology, the measurement of ageing from continuous signals like wearable devices, is a good trick on its own. So that’s why we announced this GeroSense project,” he goes on.
“Ageing is this gradual decline of your functional abilities which is bad but you can go to the gym and potentially improve them. But the problem is you’re losing this resilience. Which means that when you’re [biologically] stressed you cannot get back to the norm as quickly as possible. So we report this resilience. So when people start losing this resilience it means that they’re not robust anymore and the same level of stress as in their 20s would get them [knocked off] the rails.
“We believe this loss of resilience is one of the key ageing phenotypes because it tells you that you’re vulnerable for future diseases even before those diseases set in.”
“In-house everything is ageing. We are totally committed to ageing: Measurement and intervention,” adds Fedichev. “We want to building something like an operating system for longevity and wellness.”
Gero is also generating some revenue from two pilots with “top range” insurance companies — which Fedichev says it’s essentially running as a proof of business model at this stage. He also mentions an early pilot with Pepsi Co.
He sketches a link between how it hopes to work with insurance companies in the area of health outcomes with how Elon Musk is offering insurance products to owners of its sensor-laden Teslas, based on what it knows about how they drive — because both are putting sensor data in the driving seat, if you’ll pardon the pun. (“Essentially we are trying to do to humans what Elon Musk is trying to do to cars,” is how he puts it.)
But the nearer term plan is to raise more funding — and potentially switch to offering the API for free to really scale up the data capture potential.
Zooming out for a little context, it’s been almost a decade since Google-backed Calico launched with the moonshot mission of ‘fixing death’. Since then a small but growing field of ‘longevity’ startups has sprung up, conducting research into extending (in the first instance) human lifespan. (Ending death is, clearly, the moonshot atop the moonshot.)
Death is still with us, of course, but the business of identifying possible drugs and therapeutics to stave off the grim reaper’s knock continues picking up pace — attracting a growing volume of investor dollars.
The trend is being fuelled by health and biological data becoming ever more plentiful and accessible, thanks to open research data initiatives and the proliferation of digital devices and services for tracking health, set alongside promising developments in the fast-evolving field of machine learning in areas like predictive healthcare and drug discovery.
Longevity has also seen a bit of an upsurge in interest in recent times as the coronavirus pandemic has concentrated minds on health and wellness, generally — and, well, mortality specifically.
Nonetheless, it remains a complex, multi-disciplinary business. Some of these biotech moonshots are focused on bioengineering and gene-editing — pushing for disease diagnosis and/or drug discovery.
Plenty are also — like Gero — trying to use AI and big data analysis to better understand and counteract biological ageing, bringing together experts in physics, maths and biological science to hunt for biomarkers to further research aimed at combating age-related disease and deterioration.
Another recent example is AI startup Deep Longevity, which came out of stealth last summer — as a spinout from AI drug discovery startup Insilico Medicine — touting an AI ‘longevity as a service’ system which it claims can predict an individual’s biological age “significantly more accurately than conventional methods” (and which it also hopes will help scientists to unpick which “biological culprits drive aging-related diseases”, as it put it).
Gero AI is taking a different tack toward the same overarching goal — by honing in on data generated by activity sensors embedded into the everyday mobile devices people carry with them (or wear) as a proxy signal for studying their biology.
The advantage being that it doesn’t require a person to undergo regular (invasive) blood tests to get an ongoing measure of their own health. Instead our personal device can generate proxy signals for biological study passively — at vast scale and low cost. So the promise of Gero’s ‘digital biomarkers’ is they could democratize access to individual health prediction.
And while billionaires like Peter Thiel can afford to shell out for bespoke medical monitoring and interventions to try to stay one step ahead of death, such high end services simply won’t scale to the rest of us.
If its digital biomarkers live up to Gero’s claims, its approach could, at the least, help steer millions towards healthier lifestyles, while also generating rich data for longevity R&D — and to support the development of drugs that could extend human lifespan (albeit what such life-extending pills might cost is a whole other matter).
The insurance industry is naturally interested — with the potential for such tools to be used to nudge individuals towards healthier lifestyles and thereby reduce payout costs.
For individuals who are motivated to improve their health themselves, Fedichev says the issue now is it’s extremely hard for people to know exactly which lifestyle changes or interventions are best suited to their particular biology.
For example fasting has been shown in some studies to help combat biological ageing. But he notes that the approach may not be effective for everyone. The same may be true of other activities that are accepted to be generally beneficial for health (like exercise or eating or avoiding certain foods).
Again those rules of thumb may have a lot of nuance, depending on an individual’s particular biology. And scientific research is, inevitably, limited by access to funding. (Research can thus tend to focus on certain groups to the exclusion of others — e.g. men rather than women; or the young rather than middle aged.)
This is why Fedichev believes there’s a lot of value in creating a measure than can address health-related knowledge gaps at essentially no individual cost.
Gero has used longitudinal data from the UK’s biobank, one of its research partners, to verify its model’s measurements of biological age and resilience. But of course it hopes to go further — as it ingests more data.
“Technically it’s not properly different what we are doing — it just happens that we can do it now because there are such efforts like UK biobank. Government money and also some industry sponsors money, maybe for the first time in the history of humanity, we have this situation where we have electronic medical records, genetics, wearable devices from hundreds of thousands of people, so it just became possible. It’s the convergence of several developments — technological but also what I would call ‘social technologies’ [like the UK biobank],” he tells TechCrunch.
“Imagine that for every diet, for every training routine, meditation… in order to make sure that we can actually optimize lifestyles — understand which things work, which do not [for each person] or maybe some experimental drugs which are already proved [to] extend lifespan in animals are working, maybe we can do something different.”
“When we will have 1M tracks [half a year’s worth of data on 1M individuals] we will combine that with genetics and solve ageing,” he adds, with entrepreneurial flourish. “The ambitious version of this plan is we’ll get this million tracks by the end of the year.”
Fitness and health apps are an obvious target partner for data-loving longevity researchers — but you can imagine it’ll be a mutual attraction. One side can bring the users, the other a halo of credibility comprised of deep tech and hard science.
“We expect that these [apps] will get lots of people and we will be able to analyze those people for them as a fun feature first, for their users. But in the background we will build the best model of human ageing,” Fedichev continues, predicting that scoring the effect of different fitness and wellness treatments will be “the next frontier” for wellness and health (Or, more pithily: “Wellness and health has to become digital and quantitive.”)
“What we are doing is we are bringing physicists into the analysis of human data. Since recently we have lots of biobanks, we have lots of signals — including from available devices which produce something like a few years’ long windows on the human ageing process. So it’s a dynamical system — like weather prediction or financial market predictions,” he also tells us.
“We cannot own the treatments because we cannot patent them but maybe we can own the personalization — the AI that personalized those treatments for you.”
From a startup perspective, one thing looks crystal clear: Personalization is here for the long haul.
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In the early 2000s, Jeff Bezos gave a seminal TED Talk titled “The Electricity Metaphor for the Web’s Future.” In it, he argued that the internet will enable innovation on the same scale that electricity did.
We are at a similar inflection point in healthcare, with the recent movement toward data transparency birthing a new generation of innovation and startups.
Those who follow the space closely may have noticed that there are twin struggles taking place: a push for more transparency on provider and payer data, including anonymous patient data, and another for strict privacy protection for personal patient data. What’s the main difference?
This sector is still somewhat nascent — we are in the first wave of innovation, with much more to come.
Anonymized data is much more freely available, while personal data is being locked even tighter (as it should be) due to regulations like GDPR, CCPA and their equivalents around the world.
The former trend is enabling a host of new vendors and services that will ultimately make healthcare better and more transparent for all of us.
These new companies could not have existed five years ago. The Affordable Care Act was the first step toward making anonymized data more available. It required healthcare institutions (such as hospitals and healthcare systems) to publish data on costs and outcomes. This included the release of detailed data on providers.
Later legislation required biotech and pharma companies to disclose monies paid to research partners. And every physician in the U.S. is now required to be in the National Practitioner Identifier (NPI), a comprehensive public database of providers.
All of this allowed the creation of new types of companies that give both patients and providers more control over their data. Here are some key examples of how.
This is a key capability of patients’ newly found access to health data. Think of how often, as a patient, providers aren’t aware of treatment or a test you’ve had elsewhere. Often you end up repeating a test because a provider doesn’t have a record of a test conducted elsewhere.
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As Nvidia continues to work through its deal to acquire Arm from SoftBank for $40 billion, the computing giant is making another big move to lay out its commitment to investing in U.K. technology. Today the company announced plans to develop Cambridge-1, a new £40 million AI supercomputer that will be used for research in the health industry in the country, the first supercomputer built by Nvidia specifically for external research access, it said.
Nvidia said it is already working with GSK, AstraZeneca, London hospitals Guy’s and St Thomas’ NHS Foundation Trust, King’s College London and Oxford Nanopore to use the Cambridge-1. The supercomputer is due to come online by the end of the year and will be the company’s second supercomputer in the country. The first is already in development at the company’s AI Center of Excellence in Cambridge, and the plan is to add more supercomputers over time.
The growing role of AI has underscored an interesting crossroads in medical research. On one hand, leading researchers all acknowledge the role it will be playing in their work. On the other, none of them (nor their institutions) have the resources to meet that demand on their own. That’s driving them all to get involved much more deeply with big tech companies like Google, Microsoft and, in this case, Nvidia, to carry out work.
Alongside the supercomputer news, Nvidia is making a second announcement in the area of healthcare in the U.K.: it has inked a partnership with GSK, which has established an AI hub in London, to build AI-based computational processes that will be used in drug vaccine and discovery — an especially timely piece of news, given that we are in a global health pandemic and all drug makers and researchers are on the hunt to understand more about, and build vaccines for, COVID-19.
The news is coinciding with Nvidia’s industry event, the GPU Technology Conference.
“Tackling the world’s most pressing challenges in healthcare requires massively powerful computing resources to harness the capabilities of AI,” said Jensen Huang, founder and CEO of Nvidia, in his keynote at the event. “The Cambridge-1 supercomputer will serve as a hub of innovation for the U.K., and further the groundbreaking work being done by the nation’s researchers in critical healthcare and drug discovery.”
The company plans to dedicate Cambridge-1 resources in four areas, it said: industry research, in particular joint research on projects that exceed the resources of any single institution; university granted compute time; health-focused AI startups; and education for future AI practitioners. It’s already building specific applications in areas, like the drug discovery work it’s doing with GSK, that will be run on the machine.
The Cambridge-1 will be built on Nvidia’s DGX SuperPOD system, which can process 400 petaflops of AI performance and 8 petaflops of Linpack performance. Nvidia said this will rank it as the 29th fastest supercomputer in the world.
“Number 29” doesn’t sound very groundbreaking, but there are other reasons why the announcement is significant.
For starters, it underscores how the supercomputing market — while still not a mass-market enterprise — is increasingly developing more focus around specific areas of research and industries. In this case, it underscores how health research has become more complex, and how applications of artificial intelligence have both spurred that complexity but, in the case of building stronger computing power, also provides a better route — some might say one of the only viable routes in the most complex of cases — to medical breakthroughs and discoveries.
It’s also notable that the effort is being forged in the U.K. Nvidia’s deal to buy Arm has seen some resistance in the market — with one group leading a campaign to stop the sale and take Arm independent — but this latest announcement underscores that the company is already involved pretty deeply in the U.K. market, bolstering Nvidia’s case to double down even further. (Yes, chip reference designs and building supercomputers are different enterprises, but the argument for Nvidia is one of commitment and presence.)
“AI and machine learning are like a new microscope that will help scientists to see things that they couldn’t see otherwise,” said Dr. Hal Barron, chief scientific officer and president, R&D, GSK, in a statement. “NVIDIA’s investment in computing, combined with the power of deep learning, will enable solutions to some of the life sciences industry’s greatest challenges and help us continue to deliver transformational medicines and vaccines to patients. Together with GSK’s new AI lab in London, I am delighted that these advanced technologies will now be available to help the U.K.’s outstanding scientists.”
“The use of big data, supercomputing and artificial intelligence have the potential to transform research and development; from target identification through clinical research and all the way to the launch of new medicines,” added James Weatherall, PhD, head of Data Science and AI, AstraZeneca, in his statement.
“Recent advances in AI have seen increasingly powerful models being used for complex tasks such as image recognition and natural language understanding,” said Sebastien Ourselin, head, School of Biomedical Engineering & Imaging Sciences at King’s College London. “These models have achieved previously unimaginable performance by using an unprecedented scale of computational power, amassing millions of GPU hours per model. Through this partnership, for the first time, such a scale of computational power will be available to healthcare research – it will be truly transformational for patient health and treatment pathways.”
Dr. Ian Abbs, chief executive & chief medical director of Guy’s and St Thomas’ NHS Foundation Trust Officer, said: “If AI is to be deployed at scale for patient care, then accuracy, robustness and safety are of paramount importance. We need to ensure AI researchers have access to the largest and most comprehensive datasets that the NHS has to offer, our clinical expertise, and the required computational infrastructure to make sense of the data. This approach is not only necessary, but also the only ethical way to deliver AI in healthcare – more advanced AI means better care for our patients.”
“Compact AI has enabled real-time sequencing in the palm of your hand, and AI supercomputers are enabling new scientific discoveries in large-scale genomic data sets,” added Gordon Sanghera, CEO, Oxford Nanopore Technologies. “These complementary innovations in data analysis support a wealth of impactful science in the U.K., and critically, support our goal of bringing genomic analysis to anyone, anywhere.”
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The world of healthcare has notoriously been described as “broken” — plagued with high-friction workflows, sky-high costs and convoluted business models.
Over the past several years, a long list of innovative startups and salivating venture investors have pinned their focus on repairing the healthcare industry, but its digital transformation still appears to be in the very early innings. After a record-setting 2018, however, digital health investing continued to reach meteoric heights in 2019.
Mammoth pools of capital have flooded into various sub-verticals and business models, backing collections of new B2B and B2C companies focused on optimizing healthcare workflows, improving healthcare access and offering lower-cost distribution models. Over the past two years, digital health startups have raised well over $10 billion in funding across nearly 1,000 deals, according to data from Pitchbook and Crunchbase.
As we close out another strong year for innovation and venture investing in the sector, we asked nine leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in the sector:
Participants discuss trends in digital therapeutics, telehealth, mental health and the latest in biotech and medical devices, while also diving into startups improving medical practitioner efficiency, evaluating the evolving regulatory environment and debating valuations and offering a ‘temp check’ on the market for digital health startups leveraging ML.
Although Kleiner Perkins has a long history of investing in iconic health companies, we believe it is still the early innings of digital health as a category today.
When I evaluate new opportunities in the space, I often start by thinking through how the company will move the needle on cost, quality, and access to care — the “iron triangle” of health care systems. Conventional wisdom has been that it’s impossible to improve all three dimensions simultaneously, but we are seeing companies leverage technology to shift this paradigm in meaningful ways.
It’s no longer just a promise. For example, Viz.ai is using artificial intelligence to detect and alert stroke teams to suspected large vessel occlusion strokes, enabling patients to get treatment faster. Their workflows improve access to life-saving care, deliver higher quality through reduced time to treatment (every minute counts as ‘time is brain’ in stroke care), and dramatically reduce the costs associated with long-term disability.
We are also seeing companies provide this type of tech-enabled care outside of the hospital setting. Modern Health is a mental health benefits platform that employers are making available to their employees. The platform triages individual employees to the right level of care, providing clinical care to those with diagnosable depression or anxiety, and making self-guided or preventative care available to everyone else. Their solution improves quality and access by offering mental health services to every employee and reduces the cost associated with untreated mental illness, lost productivity, or employee churn.
Heading into 2020, we’re eager to back digital health companies in new areas that leverage technology to impact cost, quality, and access. A few spaces that I’m excited about are behavioral health (mental health, substance abuse, addiction, etc), care navigation, digital therapeutics, and new models integrating telehealth, remote care and AI to better leverage medical professionals’ time.
Below are some thoughts and coming predictions on health tech broadly:
- Digital therapeutics continue to pick up steam — on the back of Pear and Akili, more companies push to FDA and enter the market. In addition, broader consumer platforms like Calm and Headspace look to broaden their offerings by investigating clinical approvals.
- At least one major pharma looks to expand its consumer surface area by acquiring one of the new digital, consumer-facing generics platform (ex Hims, Ro, NuRx).
- Venture funding for biotech continues to boom with at least three Series A’s of $100M or more in size.
- Drug discovery for neurodegeneration sees a renaissance. High-profile failings of Biogen and the beta-amyloid hypothesis sees a shift of innovation to early-stage biotech and venture creation.
- Big pharma has its DeepMind moment acquiring at least one machine-learning (AI) enabled drug discovery company.
- Clinical trial tech investments heat up; new companies and technologies emerge to make trials patients first and systems get smarter at finding the right patients at their point of care; large incumbents like IQVIA, LabCorp and PPD get acquisitive.
- At least three traditional Sand Hill Road tech venture firms open life science practices or raise dedicated funds.
- Machine learning targets chemistry driven by large advancements in transformer (NLP) models; has the time for computational chemistry finally come?
- HCIT sees a renaissance driven by increased CIO responsibility towards data interoperability. Companies either working on federated ML to allow systems to speak to each other or lightweight edge applications enabling rapid clinical deployment will see quick uptake and traction, until now impossible in HC.
Kristin Baker Spohn, CRV
In the last 10 years, digital health has exploded. Over $16B has been invested in the sector by VCs and we’ve seen IPOs from Livongo, Progyny and Health Catalyst, just in the last year alone. That said, there’s still a lot that mystifies people about the sector — there are spots that are overheated and models that will struggle to deliver venture scale outcomes. I’ve seen digital health evolve first hand as both an operator and investor, and I’m more excited than ever about the future of the space.
A few areas and trends that I’ve been following recently include:
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Much of Silicon Valley mythology is centered on the founder-as-hero narrative. But historically, scientific founders leading the charge for bio companies have been far less common.
Developing new drugs is slow, risky and expensive. Big clinical failures are all too common. As such, bio requires incredibly specialized knowledge and experience. But at the same time, the potential for value creation is enormous today more than ever with breakthrough new medicines like engineered cell, gene and digital therapies.
What these breakthroughs are bringing along with them are entirely new models — of founders, of company creation, of the businesses themselves — that will require scientists, entrepreneurs and investors to reimagine and reinvent how they create bio companies.
In the past, biotech VC firms handled this combination of specialized knowledge + binary risk + outsized opportunity with a unique “company creation” model. In this model, there are scientific founders, yes; but the VC firm essentially founded and built the company itself — all the way from matching a scientific advance with an unmet medical need, to licensing IP, to having partners take on key roles such as CEO in the early stages, to then recruiting a seasoned management team to execute on the vision.
Image: PASIEKA/SCIENCE PHOTO LIBRARY/Getty Images
You could call this the startup equivalent of being born and bred in captivity — where great care and feeding early in life helps ensure that the company is able to thrive. Here the scientific founders tend to play more of an advisory role (usually keeping day jobs in academia to create new knowledge and frontiers), while experienced “drug hunters” operate the machinery of bringing new discoveries to the patient’s bedside. This model’s core purpose is to bring the right expertise to the table to de-risk these incredibly challenging enterprises — nobody is born knowing how to make a medicine.
But the ecosystem this model evolved from is evolving itself. Emerging fields like computational biology and biological engineering have created a new breed of founder, native to biology, engineering and computer science, that are already, by definition, the leading experts in their fledgling fields. Their advances are helping change the industry, shifting drug discovery away from a highly bespoke process — where little knowledge carries over from the success or failure of one drug to the next — to a more iterative, building-block approach like engineering.
Take gene therapy: once we learn how to deliver a gene to a specific cell in a given disease, it is significantly more likely we will be able to deliver a different gene to a different cell for another disease. Which means there’s an opportunity not only for novel therapies but also the potential for new business models. Imagine a company that provides gene delivery capability to an entire industry — GaaS: gene-delivery as a service!
Once a founder has an idea, the costs of testing it out have changed too. The days of having to set up an entire lab before you could run your first experiments are gone. In the same way that AWS made starting a tech company vastly faster and easier, innovations like shared lab spaces and wetlab accelerators have dramatically reduced the cost and speed required to get a bio startup off the ground. Today it costs thousands, not millions, for a “killer experiment” that will give a founding team (and investors) early conviction.
What all this amounts to is scientific founders now have the option of launching bio companies without relying on VCs to create them on their behalf. And many are. The new generation of bio companies being launched by these founders are more akin to being born in the wild. It isn’t easy; in fact, it’s a jungle out there, so you need to make mistakes, learn quickly, hone your instincts, and be well-equipped for survival. On the other hand, given the transformative potential of engineering-based bio platforms, the cubs that do survive can grow into lions.
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So, which is better for a bio startup today: to be born in the wild — with all the risk and reward that entails — or to be raised in captivity
The “bred in captivity” model promises sureness, safety, security. A VC-created bio company has cache and credibility right off the bat. Launch capital is essentially guaranteed. It attracts all-star scientists, executives and advisors — drawn by the balance of an innovative, agile environment and a well-funded, well-connected support network. I was fortunate enough to be an early executive in one of these companies, giving me the opportunity to work alongside industry luminaries and benefit from their well-versed knowledge of how to build a world-class bio company with all its complex component parts: basic, translational, clinical research, from scratch. But this all comes at a price.
Because it’s a heavy lift for the VCs, scientific founders are usually left with a relatively small slug of equity — even founding CEOs can end up with ~5% ownership. While these companies often launch with headline-grabbing funding rounds of $50m or above, the capital is tranched — meaning money is doled out as planned milestones are achieved. But the problem is, things rarely go according to plan. Tranched capital can be a safety net, but you can get tangled in that net if you miss a milestone.
Being born in the wild, on the other hand, trades safety for freedom. No one is building the company on your behalf; you’re in charge, and you bear the risk. As a recent graduate, I co-founded a company with Harvard geneticist George Church. The company was bootstrapped — a funding strategy that was more famine than feast — but we were at liberty to try new things and run (un)controlled experiments like sequencing heavy metal wildman Ozzy Osbourne.

It was the early, Wild West days of the genomics revolution and many of the earliest biotech companies mirrored that experience — they weren’t incepted by VCs; they were created by scrappy entrepreneurs and scientists-turned-CEO. Take Joshua Boger, organic chemist and founder of Vertex Pharmaceuticals: starting in 1989 his efforts to will into existence a new way to develop drugs, thrillingly captured in Barry Werth’s The Billion-Dollar Molecule and its sequel The Antidote in all its warts and nail-biting glory, ultimately transformed how we treat HIV, hepatitis C and cystic fibrosis.
Today we’re in a back-to-the-future moment and the industry is being increasingly pushed forward by this new breed of scientist-entrepreneur. Students-turned-founder like Diego Rey of in vitro diagnostics company GeneWEAVE and Ramji Srinivasan of clinical laboratory Counsyl helped transform how we diagnose disease and each led their companies to successful acquisitions by larger rivals.
Popular accelerators like Y Combinator and IndieBio are filled with bio companies driven by this founder phenotype. Ginkgo Bioworks, the first bio company in Y Combinator and today a unicorn, was founded by Jason Kelly and three of his MIT biological engineering classmates, along with former MIT professor and synthetic biology legend Tom Knight. The company is not only innovating new ways to program biology in order to disrupt a broad range of industries, but it’s also pioneering an innovative conglomerate business model it has dubbed the “Berkshire for biotech.”
Like the Ginkgo founders, Alec Nielsen and Raja Srinivas launched their startup Asimov, an ambitious effort to program cells using genetic circuits, shortly after receiving their PhDs in biological engineering from MIT. And, like Boger, renowned machine learning Stanford professor Daphne Koller is working to once again transform drug discovery as the founder and CEO of Instiro.
Just like making a medicine, no one is born knowing how to build a company. But in this new world, these technical founders with deep domain expertise may even be more capable of traversing the idea maze than seasoned operators. Engineering-based platforms have the potential to create entirely new applications with unprecedented productivity, creating opportunities for new breakthroughs, novel business models, and new ways to build bio companies. The well-worn playbooks may be out of date.
Founders that choose to create their own companies still need investors to scrub in and contribute to the arduous labor of company-building — but via support, guidance, and with access to networks instead. And like this new generation of founders, bio investors today need to rethink (and re-value) the promise of the new, and still appreciate the hard-earned wisdom of the old. In other words, bio investors also need to be multidisciplinary. And they need to be comfortable with a different kind of risk: backing an unproven founder in a new, emerging space. As a founder, if you’re willing to take your chances in the wild, you should have an investor that understands you, believes in you, can support you and, importantly, is willing to dream big with you.
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23andMe, IBM and now uBiome is the next tech company to jump into the lucrative multi-billion dollar drug discovery market.
The company started out with a consumer gut health test to check whether your intestines carry the right kind of bacteria for healthy digestion but has since expanded to include over 250,000 samples for everything from the microbes on your skin to vaginal health — the largest data set in the world for these types of samples, according to the company.
Founder Jessica Richman now says there’s a wider opportunity to use this data to create value in therapeutics.
To support its new drug discovery efforts, the San Francisco-based startup will be moving its therapeutics unit into new Cambridge, Massachusetts headquarters and appointing former Novartis CEO Joseph Jimenez to the board of directors as well.
The company has a healthy pile of cash to help build out that new HQ, too, with a fresh $83 million Series C, lead by OS Fund and in participation with 8VC, Y Combinator, Dentsu Ventures and others.
The drug discovery market is slated to be worth nearly $86 billion by 2022, according to BCC Research numbers. New technologies — those that solve logistics issues and shorten the time between research and getting a drug to market in particular — are driving the growth and that’s where uBiome thinks it can get into the game.
“This financing allows us to expand our product portfolio, increase our focus on patent assets and further raise our clinical profile, especially as we begin to focus on commercialization of drug discovery and development of our patent assets,” Richman said.
Though its unclear at this time which drug maker the company might partner up with, Richman did say there would be plenty to announce later on that front.
So far, the company has published over 30 peer-reviewed papers on microbiome research, has entered into research partnerships with the likes of the Center for Disease Control (CDC) and leading research institutions such as Harvard, MIT and Stanford and has previously raised $22 million in funding. The additional VC cash puts the total amount raised to $105 million to date.
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The pace at which the scientific breakthroughs working to bend the machinery of life to the whims of manufacturing have transformed into real businesses has intensified competition in the biomanufacturing market.
That’s just one reason why Synvitrobio is rebranding as it takes on $2.6 million in new financing to pursue opportunities in biopharmaceutical and biochemical manufacturing. Under its new name, Tierra Biosciences, the company hopes to emphasize its focus on agricultural and biochemical products.
The company is one of several looking to commercialize the field of “cell-free” manufacturing — where biological engineers strip down the cellular building blocks of life to their most basic components to create processes that ideally can be more easily manipulated to produce different kinds of chemicals.
There’s a standard way to create these cell-free processes (described quite nicely in The Economist).
Grab a few quarts of culture with some kind of bacteria, plant or animal cells in it. Then use pressure to force the cells through a valve to break up their membranes and DNA. Give the goo a nice warm environment heated to roughly the average temperature of a human body for about an hour. That activates enzymes that will eat the existing DNA.
Put all of it in a centrifuge to separate out the ribosomes (which are the important bits). Take those ribosomes and give them a mixture of sugars, amino acids, adenosine triphosphate (the molecular compound that breaks down to provide energy for all biological functions) and new DNA with a different set of instructions on what to make and voila! Micro-factories in a test tube.

Along with co-founders Richard Murray of the California Institute of Technology and George Church, one of the living legends of modern genetics, chief executive officer Zachary Sun designed Tierra to be an engine for new biochemical discovery.
“Everything floats in the cytoplasm… We keep that internal stuff and that allows us to run reactions where a cell wall isn’t necessary. I want to reduce the complex system down to its component parts,” says Sun. “We look at this as a data collection problem. We want to use cell-free to tell you what to put either in a cell or in cell-free systems… We can collect more data faster using our cell-free system.”
The startup is already working with the Department of Energy research institution at Oak Ridge National Laboratory to develop processes to create vanillin (vanilla extract) and mevalonate (turpentine) from biomass.
It’s an approach that is already showing the potential for investment returns in life sciences and pharmaceuticals. For inspiration, Tierra can look to the South San Francisco-based Sutro Biopharma.
That company has signed a drug discovery agreement with Merck to develop new immune-modulating therapies (that bring the immune system into check) for cancer and auto-immune disorders, in a deal worth up to $1.6 billion if the company hits certain milestones — in addition to a $60 million upfront payment. Sutro raised more than $85 million in new funding in July (from investors including Merck) and just filed to go public on the Nasdaq.
According to Sun, the newly named Tierra has its own partnerships with global 2,000 companies in the works. “We’re looking to scale those commitments. We see the application space as being this natural products environment,” he says.
There’re multiple avenues to pursue, with the technology widely applicable to everything from pesticides to pharmaceuticals, flavorings and even energy.
Cyclotron Road team photos. 2016. Zachary Sun.
“Synthetic biology at its core is about applying engineering best practices to speed up the ‘design-build-test’ cycles in the reprogramming of existing or construction of new biological systems. By component-izing and modularizing the cell they can radically increase the speed of those cycles,” says Seth Bannon, a co-founder of the venture capital firm Fifty Years, which invests in startups commercializing “frontier” science.
For the investors, entrepreneurs and reporters who witnessed the birth of the cleantech bubble a decade ago and then tracked its implosion in subsequent years, the excitement this kind of technology elicits is another of history’s rhymes.
Technologies like Tierra’s aren’t new. San Diego-based Genomatica has been working on biological manufacturing for the past 18 years. The company is now exploring a cell-free system to grow chemicals that are used in the manufacture of materials like Lycra. Since 2008, Medford, Mass.-based GreenLight Biosciences has been working to bring its own biologically based zero-calorie sugar substitute to market.
What may be different now is the maturity of the technologies that are being commercialized and the perspective of the startups coming to market — who have the benefit of avoiding the missteps made by an earlier generation.
Investors led by Social Capital with participation from Fifty Years, KdT Ventures and angel investors seem to see a difference in these companies. And large research institutions are also marshaling resources to support the vision laid out by Sun, Murray and Church. DARPA, the National Institutes of Health, the Department of Energy, Cyclotron Road and Lawrence Berkeley National Laboratory, the National Science Foundation and the Gates Foundation have all backed the company, as well.
“So many therapeutic molecules come from nature. As the DNA of plants, animals and microbes is read in exponentially increasing volume, we expect to find useful and game-changing chemistry encoded by it. Tierra’s platform will allow us to look for molecules which might otherwise be buried in the complexity of cells’ metabolism,” says Louis Metzger, chief scientific officer of Tierra, who comes from a background of drug discovery.
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Atomwise, which uses deep learning to shorten the process of discovering new drugs, has raised a $45 million Series A. The round was led by Monsanto Growth Ventures, Data Collective (DCVC) and B Capital Group. Baidu Ventures, Tencent and Dolby Family Ventures, which are all new investors in Atomwise, also participated, as well as returning investors Y Combinator, Khosla Ventures and DFJ. Read More
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