Advances in generative AI have sparked excitement and investment in the tech world. Biotech investors are now placing their bets on the potential of computational methods to revolutionize drug discovery. In line with this trend, ARCH Venture Partners and Foresite Labs recently announced their incubation of Xaira Therapeutics, an AI biotech company, with a staggering $1 billion in funding. Notable investors in Xaira 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, brings impressive credentials to the table. As a former Stanford president and chief scientific officer at Genentech, Tessier-Lavigne believes that recent breakthroughs in AI have made it possible to develop drugs that were previously unimaginable. He stated, “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.”
The foundational models behind Xaira’s advancements stem from the University of Washington’s Institute of Protein Design, led by co-founder David Baker. These models draw inspiration from diffusion models used in image generators like OpenAI’s DALL-E and Midjourney. However, instead of creating art, Baker’s models aim to design molecular structures that can be synthesized in the physical world.
Although Xaira’s investors are optimistic about the potential of generative AI in biology, they acknowledge that the field is still in its early stages. Vik Bajaj, CEO of Foresite Labs and managing director of Foresite Capital, noted that unlike technology where data for AI training is generated by consumers, biology and medicine face challenges due to a scarcity of available data. In this regard, companies like Xaira need to invest considerable resources in generating the datasets required for model development.
Xaira is not alone in utilizing generative AI for drug design. Other companies, such as Recursion and Genesis Therapeutics, have also embraced this approach. Recursion recently went public in 2021, while Genesis Therapeutics raised $200 million in a Series B funding round led by Andreessen Horowitz.
While Xaira has not disclosed a specific timeline for its first drug to enter human trials, it is clear that the company and its investors are committed to playing the long game. Bob Nelsen emphasized the need for significant financial resources to establish a successful drug company and leverage AI effectively.
Xaira’s decision to appoint Marc Tessier-Lavigne as CEO has garnered attention, particularly due to his resignation from Stanford amid allegations of research data manipulation at Genentech. However, investors maintain their confidence in Tessier-Lavigne’s integrity and scientific vision. Bob Nelsen expressed his support, stating, “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. Stanford exonerated him of any wrongdoing or scientific misconduct.”
In conclusion, Xaira Therapeutics represents a significant player in the field of AI drug discovery. With substantial funding and a team of experienced individuals, including CEO Marc Tessier-Lavigne, the company aims to harness the power of generative AI to revolutionize drug design. While challenges remain, such as the scarcity of data in biology and medicine, Xaira and other biotech companies are well-positioned to drive innovation and make groundbreaking contributions to the field.
