AI Revolutionizes Drug Discovery: Xaira Therapeutics Secures $1 Billion
The rapidly evolving landscape of artificial intelligence (AI) is making waves in the healthcare industry, and the field of drug discovery is taking notice. Biotech investors are placing their bets on the transformative potential of AI to revolutionize the way drugs are developed.
ARCH Venture Partners and Foresite Labs, an affiliate of Foresite Capital, have recently announced the launch of Xaira Therapeutics, an AI biotech company that has secured an impressive $1 billion in funding. Operating in stealth mode for the past six months, Xaira boasts a consortium of renowned investors, including F-Prime, NEA, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, Menlo Ventures, Two Sigma Ventures, and SV Angel.
At the helm of Xaira is CEO Marc Tessier-Lavigne, a former president of Stanford University and ex-chief scientific officer at Genentech. With his expertise, the company aims to leverage recent advancements in AI to create drugs that were previously impossible to develop.
“We’ve raised such a large amount of capital because we believe the technology is at a pivotal moment where it can profoundly impact the field,” Tessier-Lavigne said.
The advancements in foundational models that power Xaira’s AI capabilities originate from the University of Washington’s Institute of Protein Design, led by David Baker, one of Xaira’s co-founders. These models share similarities with the diffusion models that drive image-generating tools like OpenAI’s DALL-E and Midjourney. However, Baker’s models are tailored to the intricate task of designing molecular structures that can be realized in the three-dimensional, physical realm.
While Xaira’s investors are optimistic about the potential of generative AI in transforming drug design, they acknowledge that the field is still in its nascent stages. Vik Bajaj, CEO of Foresite Labs and managing director of Foresite Capital, highlights the challenge of data scarcity in biology and medicine compared to technology.
“Unlike in technology, where the data used to train AI models is generated by consumers, biology and medicine are data poor. You need to create the datasets that drive model development,” Bajaj explained.
Other biotech companies, such as Recursion and Genesis Therapeutics, are also exploring the use of generative AI in drug design, reflecting the growing momentum in this area. While Xaira declined to provide a timeline for its first drug to enter human trials, investors like Bob Nelsen emphasize that the company and its backers are prepared for the long haul.
“You need billions of dollars to be a real drug company and also think AI. Both of those are expensive disciplines,” Nelsen said.
Xaira’s aspirations are set firmly on becoming a powerhouse in the AI-driven drug discovery landscape. However, some have expressed surprise at the appointment of Tessier-Lavigne as CEO, given his resignation from Stanford amid allegations of data manipulation at Genetech. Despite these concerns, investors remain confident in his abilities.
“I have known Marc for many years and know him to be a person of integrity and scientific vision who will be an exceptional CEO,” Nelsen said in an email. “Stanford exonerated him of any wrongdoing or scientific misconduct.”
