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Xaira Launches with $1 Billion to Pioneer AI-Driven Drug Discovery

ByHuey Yee Ong

Apr 29, 2024

Xaira Launches with $1 Billion to Pioneer AI-Driven Drug Discovery

Xaira Therapeutics, an AI drug discovery startup, recently launched with a remarkable $1 billion funding, backed by prominent investors like ARCH Venture Partners and Foresite Labs. The company, led by former Stanford president Marc Tessier-Lavigne, is set to begin developing innovative drugs utilizing recent advancements in AI.

Despite the challenges of a data-poor field, Xaira aims to leverage generative AI for revolutionary drug designs, a strategy bolstered by the inclusion of foundational models from the University of Washington’s Institute of Protein Design.

The new startup, which has been operating in stealth mode for about six months, received its initial funding from a robust group of investors, including F-Prime, NEA, Sequoia Capital, Lux Capital, Lightspeed Venture Partners, Menlo Ventures, Two Sigma Ventures, and SV Angel.

Marc Tessier-Lavigne, Xaira’s CEO, highlighted the readiness of the company to tackle drug development projects that were previously unattainable without the latest AI breakthroughs. “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,” Tessier-Lavigne stated. His confidence in AI’s transformative power in biotechnology is shared by the company’s investors, though they acknowledge the nascent stage of generative AI applications in this area.

How Will Xaira’s AI Models Transform Drug Design?

David Baker, co-founder of Xaira and leader of the University of Washington’s Institute of Protein Design, has been instrumental in advancing the foundational models that aid in designing molecular structures. These models are crucial for creating drugs in the three-dimensional, physical world, setting a parallel with diffusion models used in AI-driven image generation.

However, Xaira’s approach faces inherent challenges, as the biotech industry is significantly “data poor” compared to the tech industry, where consumer-generated data is plentiful. Vik Bajaj, CEO of Foresite Labs and managing director of Foresite Capital, explained that generating the necessary datasets for model development in biotech requires substantial investment and innovation.

The timeline for Xaira to produce a drug ready for human trials remains undisclosed. Nonetheless, investors like Bob Nelsen of ARCH Venture Partners express a readiness to support the long-term vision required for AI-enhanced drug development. “You need billions of dollars to be a real drug company and also think AI. Both of those are expensive disciplines,” Nelsen commented.

Leadership Under Scrutiny

Tessier-Lavigne’s appointment as CEO has been met with mixed reactions, following his resignation from Stanford amidst allegations of research data manipulation in his Genentech lab. Although he was not directly accused of any misconduct and Stanford later cleared him of wrongdoing, his leadership has raised some eyebrows. Still, investors like Nelsen defend his integrity and leadership capabilities.


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Featured Image courtesy of WILL RAGOZZINO/Patrick McMullan via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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