AI giant Exscientia files IPO, raises over US$460 million for drug research and development

UNITED KINGDOM – Exscientia’s initial public offering and private placement has raised US$464 million to fund its artificial intelligence-based approach to drug discovery and development.

The new cash infusion follows a US$525 million fourth-round raise in April and a US$100 million third-round raise just a month earlier.

Exscientia intends to develop its own drugs alongside a growing number of drug candidates licensed to other drugmakers, including Bristol-Myers Squibb (which recently signed a US$1.2 billion alliance with the Oxford, UK-based company), Sanofi, Bayer, Dainippon Sumitomo Pharma (DSP), and Evotec.

The company’s pipeline is led by three AI-designed drug candidates that have entered phase 1 clinical trials, including one immuno-oncology agent for solid tumors developed in collaboration with Evotec and two psychiatry-focused assets developed in coalition with Sumitomo Dainippon.

According to the company’s IPO prospectus, there are more than 25 active projects in cancer, inflammation, and rare diseases.

Exscientia claims that by using AI programs to accelerate design and discovery work, it can reduce total time required by 70 percent — its most advanced programs have reportedly gone from target identification to candidate selection in less than 18 months, compared to the industry average of four and a half years.

Exscientia stated in its IPO filing that its philosophy is that every molecule should be designed by an algorithm. According to the company, it uses “the creativity of AI” to design and select the compounds that will become drug candidates.

In addition to collaborations with pharmaceutical companies, an alliance with the Bill & Melinda Gates Foundation is aimed at developing antiviral drugs for future pandemics.

Exscientia’s pandemic research is part of a Gates Foundation antiviral collaboration, with an initial emphasis on developing new broad-spectrum coronavirus drugs.

The four-year agreement’s goal is to develop five small-molecule candidates, one of which will be for SARS-CoV-2. Influenza and the Nipah virus are two other virus targets.

The Gates Foundation is poised to take a US$35 million equity stake in Exscientia as part of the partnership; this investment was made through a private placement.

The research agreement calls for Exscientia to contribute US$35 million to the alliance over the course of the four-year agreement, matching the Gates Foundation’s investment. The company will own all commercial rights to any drugs developed through the partnership.

Meanwhile, Exscientia’s contemporaries in AI-powered drug discovery have seen their wallets grow as well: Recursion raised US$436 million in a US$436 million IPO following a US$239 million series D, while Insitro and Insilico Medicine raised US$400 million and US$255 million, respectively.

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