Three PE/VC firms lead financing for AI-driven drug company

SoftBank Vision Fund 2, PICC Capital and Morningside co-led a $318 million financing of XtalPi, an artificial intelligence-based drug discovery and development company based in Massachusetts and China. Founded in 2014 by a group of quantum physicists at MIT, XtalPi has since built a team with multi-disciplinary expertise in physics, chemistry, pharmaceutical R&D and algorithm design. XtalPi's cutting-edge technologies have led to the establishment of strategic partnerships with top international pharmaceutical companies. The SoftBank Vision Fund was formed to accelerate the AI revolution through investments in market-leading, tech-enabled growth companies across consumer, enterprise software, fintech, frontier tech, health tech, real estate, transportation and logistics, and education sectors. To date, SoftBank Vision Fund 1 and Vision Fund 2 combined have made 15 investments in China. "We believe XtalPi is a leader in transforming drug discovery through its innovative multi-disciplinary approach," said Eric Chen, Ph.D., managing partner at SoftBank Investment Advisers. "Using a combination of quantum physics, AI and cloud computing, XtalPi's technology platform is improving the efficiency and accuracy of drug research and development. We are pleased to support their mission to build healthier societies around the world." PICC Capital’s PICC Health Care Fund leverages PICC's insurance value chain to build up a convenient, intelligent and dynamic health care ecosystem through investing into biomedicine, digital health, pharmaceutical distribution, and health care and senior care service providers, etc. Morningside Venture Capital, meanwhile, is one of China's earliest early-stage venture investors with billions of dollars under management including both USD fund and RMB fund, from the commitment of sovereign wealth funds, family offices, fund of funds and university endowments. The new round of financing also includes follow-on investments from existing investors Tencent, Sequoia China, China Life and SIG. The funding will help XtalPi to develop a digital-twin drug R&D system to provide a scalable and sustainable advantage that translates to more promising drug candidates with fewer experiments in less time. "We believe AI holds the answer to solving pharma's productivity challenge,” said Dr. Shuhao Wen, chairman and co-founder at XtalPi. “More specifically, XtalPi's AI-powered platform can improve the industry's research efficiency and success rate in order to lower costs for discovering and developing new drugs. We look forward to applying our platform to help clients bring more first-in-class and breakthrough drugs to the market and address significant unmet medical needs to benefit patients on a global scale." With quantum-based theories and AI models at its core, XtalPi's platform hosts over a hundred prediction algorithms. It can accurately describe the interaction between molecules and proteins at the atomic level, and map various feature vectors of a compound to key pharmacology properties. The company also leverages the massive amount of high-accuracy data in the chemical space of drug-like molecules generated from quantum mechanics calculations for data analysis and model training. XtalPi maintains a petabyte-scale database consisting of pharmaceutically active molecules and key drug characteristics that continues to grow as its business rapidly expands.

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