When a biotech startup reveals a substantial round of funding, the announcement typically includes information about a pipeline, or at least a lead drug candidate. Large sums are also often a sign of clinical trial plans. Isomorphic Labs revealed a new $2.1 billion financing this week, but it’s saying nothing about the drugs it’s developing or the diseases they are targeting.
The biopharmaceutical community has seen this before. When Altos Labs launched with $3 billion financing in 2022, it was the largest ever round raised by any biotech company, according to PitchBook. Altos outlined a broad vision of rejuvenating and restoring cells as a way to reverse disease under the leadership of CEO Hal Barron, the former chief scientific officer of GSK. But there was no information about a drug pipeline then and there still aren’t any details about a molecule or a clinical program now, said Ben Zercher, senior biotech & pharma analyst at PitchBook.
“Altos did cite scientific publications that supported their thesis, which is more preclinical direction than we have for Isomorphic Labs, but both companies gave far less transparency than is standard for biotech companies raising large rounds,” Zercher said in an email.
Isomorphic isn’t a traditional drug discovery company. The London-based startup is a subsidiary of technology conglomerate Alphabet. It was spawned by DeepMind, another Alphabet subsidiary that applies machine learning techniques to solve problems. Isomorphic’s founder and CEO is Demis Hassabis, who is also the co-founder and CEO of DeepMind.
Isomorphic describes its technology platform as a unified computational drug design system whose predictive accuracy goes beyond that of AlphaFold 3, an AI model developed by Isomorphic and DeepMind that predicts the structure and interactions of all the molecules that make up life. Those predictions can help Isomorphic identify molecules that bind to particular disease targets. Predictions can also help the company find places for a drug to bind to an elusive target. But to be fair, there are other techbio companies applying AI to those same drug discovery goals.
The potential of Isomorphic’s technology has attracted interest and research dollars from some big pharma companies. Isomorphic announced its first partnership in 2024, a multi-drug R&D alliance with Eli Lilly. The scope of this partnership is small molecule discovery for multiple targets that were undisclosed. Lilly paid $45 million up front and could shell out up to $1.7 billion more, depending on the progress of the research.
Novartis and Johnson & Johnson are also partners. The Novartis research initially focused on discovering small molecules against “three particularly challenging targets” that were undisclosed. Last year, this alliance expanded to three additional research programs. The J&J partnership spans multiple therapeutic modalities for challenging disease targets that remain undisclosed.
The new financing for Isomorphic comes a little more than a year after its $600 million Series A round. At that time, the startup said its internal programs were mainly in oncology and immunology. There are no additional details now. Isomorphic said it will use the new capital to continue development of its technology as it works to advance its drug pipeline closer to human testing. No timeline was disclosed for reaching the clinic.
Isomorphic’s Series B round was led by Thrive Capital, a firm that invests in internet, software, and technology-enabled companies. Thrive’s healthcare investments include OpenEvidence, an AI-powered search engine that gives doctors answers to medical questions. The firm also led Isomorphic’s Series A round last year. Earlier investors Alphabet and GV participated in the latest round, joined by new investors MGX, Temasek, CapitalG, and the UK Sovereign AI Fund. In a prepared statement, Hassabis described the financing as an investor vote of confidence in Isomorphic’s AI-first approach to drug design and development.
“Now that we have shown our approach is fundamentally sound, our focus is on scaling our technology to its full potential,” he said. “This capital injection allows us to build out our drug design engine at scale, driving us forward in our mission to solve all disease.”
None of Isomorphic’s financial backers are traditional biotech investors, but Zercher doesn’t see that as necessarily being negative. He acknowledged that traditional biotech venture capital firms would bring a level of scientific due diligence that tech investors may not. That said, the absence of traditional biotech VCs in the Series B round means these life science-focused investors can focus on other aspects of the biotech ecosystem and they aren’t riding on the outcome of a single preclinical company, such as Isomorphic. That risk rests with tech investors.
“Tech and AI money can go towards larger, riskier preclinical outlier bets like Isomorphic and Altos,” Zercher said. “This is not to say that traditional biotech VC money isn’t going toward innovative technologies — there are plenty of VC-backed AI-native biotechs on the cutting edge. It’s just that these companies have a higher evidence barrier for investment, which is a good thing.”
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