Insilico Lands $60 Million In Series D Financing

This week, Hong Kong-based Insilico Medicine announced a fresh round of funding to the tune of $60 million.

Now, unlike the funding announcements we’ve covered in recent issues, Insilico isn’t a new company coming out of stealth mode – nope, not even close. The company, which has been using AI to discover new drugs, has been turning heads in the world of biotech and longevity dating all the way back to 2014.

That said, we shouldn’t undermine the success it has had along the way and the highly-touted roadmap it has set forth for investors…

The Backdrop

Insilico Medicine, for those unaware, was started around one central idea: that AI-assisted systems can identify novel drug targets and lead-like molecules for untreated diseases, assist in the development of new treatments, and predict how well those treatments may perform in clinical trials.

AI-assisted drug development isn’t anything new in the year 2022. For example, companies such as Exscientia (NASDAQ:EXAI), Atomwise, and BenevolentAI (AMS:BAI) are also chomping at the bit. Insilico, however, sits in a unique spot as data suggests its end-to-end AI platform can achieve drug discovery from the ground floor, all the way through clinical trial predictions.

Insilico is also one of the few AI-based startups that has both vocally and clinically targeted aging, and age-related disease.

The “Ah-Ha” Moment

In 2020, Insilico identified a novel drug target for a fatal disease called idiopathic pulmonary fibrosis (IPF) which causes small air sacs and tissues deep in the lungs to begin to stiffen up and scar, making it increasingly difficult to breathe.

But the focus here is not on the drug, nor the disease… it’s the process.

Insilico’s AI system revealed a novel target and a corresponding drug candidate in under 18 months… at a tenth of the cost (only $2.6 million) that is typically associated with similar programs. For context, the standard preclinical drug development process usually takes several years and costs hundreds of millions of dollars. The efficiency at which they can potentially take a drug to the market is nothing short of remarkable. Human trials for their IPF drug candidate, for example, already started in November of last year.

Here Comes the Capital

Largely thanks to the proof-of-concept developed by the IPF project, the company’s growing pipeline, and the overall excitement around AI-based drug discovery and development, Insilico has been able to attract a long list of investors.

In 2021, almost exactly one year ago, the company managed to raise $255 million in a Series C. Lead investors included Warburg Pincus, BOLD Capital Partners, Pavilion Capital, Qiming Venture Partners – all of which participated in its latest round (Series D; $60 million) as well.

New investors include BHR Investment and an undisclosed “large, diversified asset management firm on the West Coast of the US.” Alex Zhavoronkov, Insilico’s founder and CEO, also participated in the round.

Although this week’s raise is substantially smaller than their last round, $60 million is still an impressive feat considering today’s economic environment. In today’s market, it’s fair to say that most biotech startups are bleeding, cutting costs, and saving capital – not expanding.

What’s Next?

According to a statement, Insilico plans to spend its fresh capital on the following:

• Fuel the growth of its advancing pipeline, including its lead IPF program which is currently in a Phase I study
• To further develop its AI-based drug discovery platforms, PandaOmics and Chemistry42, that identify new targets and molecules, respectively
• And fittingly, further develop a “robotic drug discovery laboratory,” and a “robotic biological data factory”

Now, if that last bullet point made your ears perk up, you’re not alone.

As the name suggests, the Suzhou Biobay-based lab will be fully run by robots and there will be, according to Zhavoronkov, “no humans allowed.” Instead, the lab will be equipped with autonomous guided vehicles (AGVs).

Robot laboratories… Artificial Intelligence… and game-changing, end-to-end drug development at a fraction of the cost…

Welcome to the world of biotech.

It’s not a matter of if, but when these innovations will start making drastic impacts on the expansion of human life.