The biotech industry is on the cusp of a revolution, thanks to the recent advances in generative AI. Investors are making a significant bet that similar computational methods can transform drug discovery, and one company, Xaira Therapeutics, has just received $1 billion in funding from top investors.
Xaira Therapeutics: A New Player in AI-Driven Biotech
On Tuesday, ARCH Venture Partners and Foresite Labs, an affiliate of Foresite Capital, announced that they had incubated Xaira Therapeutics and funded the company with $1 billion. Other notable investors include F-Prime, NEA, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, Menlo Ventures, Two Sigma Ventures, and SV Angel.
Xaira’s CEO, Marc Tessier-Lavigne, a former Stanford president and chief scientific officer at Genentech, is confident that the company is ready to start developing drugs that were previously impossible to create without recent breakthroughs in AI. "We’ve done such a large capital raise because we believe the technology is at an inflection point where it can have a transformative effect on the field," he said.
The Science Behind Xaira’s Breakthroughs
Xaira’s founders, including University of Washington’s Institute of Protein Design director David Baker, have developed foundational models that are similar to diffusion models used in image generators like OpenAI’s DALL-E and Midjourney. However, instead of creating art, these models aim to design molecular structures that can be made in a three-dimensional physical world.
The Potential of Generative AI in Biotech
While Xaira’s investors are convinced that the company can revolutionize drug discovery, they emphasize that generative AI applications in biology are still in their early stages. Vik Bajaj, CEO of Foresite Labs and managing director of Foresite Capital, notes that unlike technology, where data is created by consumers to train AI models, biology and medicine are "data poor." This means that datasets must be created from scratch to drive model development.
Other Players in the Field
Recursion, a biotech company that went public in 2021, and Genesis Therapeutics, a startup that raised $200 million in Series B funding last year, are also leveraging generative AI to design drugs. However, Xaira’s investors are confident that they can make significant strides in this area.
The Challenges Ahead
Xaira’s CEO, Marc Tessier-Lavigne, acknowledges that the company is playing a long game. "You need billions of dollars to be a real drug company and also think AI. Both of those are expensive disciplines," he said.
However, some critics have raised concerns about Tessier-Lavigne’s past involvement in a controversy surrounding research data manipulation at Genentech. While Tessier-Lavigne has denied any wrongdoing, the incident may raise questions about his suitability to lead Xaira Therapeutics.
Conclusion
The $1 billion investment in Xaira Therapeutics marks a significant milestone in the development of generative AI in biotech. As this technology continues to evolve, it has the potential to transform drug discovery and revolutionize the treatment of diseases. While there are challenges ahead, Xaira’s investors are confident that they can overcome them and make a meaningful impact in the field.
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