Hong Kong-based drug discovery and development company Insilico has secured fresh capital at a time its CEO described as a “biotech winter.”
The company has raised $35 million on the heels of its latest tranche in June, bringing its total Series D investment to $95 million. The new round was “oversubscribed,” the company’s founder and CEO Alex Zhavoronkov told londonbusinessblog.com, refusing to disclose the company’s valuation.
Prosperity7, the venture capital arm of Saudi state oil company Aramco, led the new capital injection. The fund actively seeks opportunities in and around China that can scale globally, particularly in the Middle East.
Insilico, which runs R&D teams in Hong Kong, Shanghai and New York, seems to be a good fit for Prosperity7.
“Prosperity7 inspired us to look at sustainable chemistry,” says Zhavoronkov. Insilico uses machine learning to identify potential drug targets and ultimately create the drug. The same technology can also be applied to find new and useful molecules for sustainable chemistry, an emerging field in which Aramco has been working hard, the founder explained.
Sustainable chemistry, if defined by the OECD, is “a scientific concept that aims to improve the efficiency with which natural resources are used to meet human needs for chemical products and services.” It “encompasses the design, manufacture and use of efficient, effective, safe and more environmentally friendly chemical products and processes.”
Other investors from the round include an undisclosed “large, diversified asset manager on the US West Coast”, and an assortment of financial and strategic investors such as BHR Partners, Warburg Pincus, B Capital Group, Qiming Venture Partners, Deerfield, Wilson Sonsini Goodrich & Rosati, BOLD Capital Partners and Pavilion Capital.
Zhavoronkov himself also invested in Series D financing.
When asked why the company is located between China and the US, the founder compared the drug discovery space to the early semiconductor industry, where research was mainly done in the US, while hardware manufacturing was done in China.
The discovery of AI drugs depends on a huge amount of investment in so-called contract research organizations (CROs), which support pharmaceutical or medical device companies in the form of outsourcing. China, exemplified by cities like Wuxi, has emerged in recent years as a popular CRO hub for international pharmaceutical companies.
The founder was also eager to speak about the company’s new dual-CEO structure. He recently received his PhD from GSK veteran Dr. Feng Ren to his co-CEO, who now oversees Insilico’s R&D and drug operations, while Zhavoronkov focuses on the company’s AI platform.
“Ren generates a lot of our own data for us to train AI to do better than humans. We can use this internally for drug discovery and then export this technology to the rest of the industry,” Zhavoronkov said.