Emerging from the shadows of technological innovation, the potential for generative artificial intelligence (AI) to transform drug discovery has captured the attention of the biotech investment community. Armed with the promise of computational prowess, Xaira Therapeutics, a company developed under the auspices of ARCH Venture Partners and Foresite Labs, has secured a substantial $1 billion in funding to pioneer AI in the development of new medications.
With a roster of investors that reads like a ‘who’s who’ of venture capital—ranging from Sequoia Capital and Lux Capital to Menlo Ventures and Two Sigma Ventures—Xaira Therapeutics steps out of six months in stealth mode with a mission to leverage recent AI breakthroughs for pharmaceutical innovation. At the helm as CEO is Marc Tessier-Lavigne, esteemed for his past roles at Stanford and Genentech, who believes the technology has reached a pivotal moment to significantly impact drug creation.
Rooted in the work of the University of Washington’s Institute of Protein Design, under the guidance of one of Xaira’s co-founders, David Baker, the AI models in question share a kinship with the diffusion models that fuel creative AI ventures like DALL-E. However, Baker’s focus is on conceiving molecular structures that transcend the digital realm into tangible, three-dimensional reality.
Investors are optimistic about the prospects of Xaira reshaping the landscape of data design, yet they acknowledge the nascent stage of generative AI’s application in the biological sphere. Foresite Labs’ CEO, Vik Bajaj, points out the contrast between the data-rich tech industry and the ‘data poor’ domains of biology and medicine, where datasets must be meticulously crafted to drive model development.
Among Xaira’s contemporaries in employing generative AI for drug design are Recursion, a publicly-traded entity since 2021, and Genesis Therapeutics, which recently raised $200 million in a Series B funding round. While Xaira remains discreet about the timeline for its first drug entering human trials, its backers, including ARCH Venture Partners’ managing director, Bob Nelsen, are committed to the substantial investment and patience required to forge a leading drug company in the AI arena.
In a twist, the appointment of Tessier-Lavigne as CEO of Xaira has raised eyebrows, following his resignation from Stanford due to allegations of data manipulation in his Genentech lab, charges from which he was later exonerated. Despite the controversy, investors express unwavering confidence in his integrity and leadership abilities, with Nelsen emphasizing Tessier-Lavigne’s proven track record and exoneration from any scientific misconduct.
