British AI Drug Development Biotech Exscientia Secures New £50 Million Investment

Exscientia, a British company that claims to be the world’s leader in the application of AI to small molecule drug discovery, is set to announce a the successful close of a new £49 million ($60 million) funding round. Sky News broke the story this morning, with Exscientia due to make an official announcement on the capital injection tomorrow. It is believed the new funds are earmarked for international expansion.

Denmark’s Novo Holdings, a daughter company of the Novo Nordisk Foundation, a well-known international pharmaceuticals investor, has led the investment round. Collaborations and joint ventures traditional pharmaceuticals and biotech companies have become popular over recent years, and the trend has recently accelerated in an effort to develop a vaccine and treatments for the Covid-19 virus.

Exscientia, based in Oxford, is working alongside Oxfordshire science facility Diamond Light Source and drugs developer Caibr, in the pursuit of antiviral treatments for Covid-19. Exscientia’s contribution is its AI algorithms.

The current investment round counts as Exscientia’s ‘Series C’ round. It raised a Series B investment round 18 months ago, bringing in $26 million from investors that included pharma giant Bristol Myers Squibb and Evotec, a ‘drug discovery alliance and development partnership company’.

Exscientia is well placed to successfully raise investment, with the biotech start-up  chaired by Alex Snow. Mr Snow has an enviable book of City contacts from his time in charge of the stockbroker Evolution Securities. He also previously rand the hedge fund Lansdowne Partners. He also has a strong track record in science and biotech start-ups, as the founder of Oxford Sciences Innovation (OSI). The role of OSI is to commercialise discoveries made by academics at the University of Oxford. He helped the organisation raise more than £600 million to that end.

While there is no solid information on the valuation has Exscientia achieved through its Series C round, Sky News reports sources close to the transaction as confirming it represents a “very significant” premium to the Series B round of 18 months earlier.

Exscientia is the first biotech company to reach phase one human clinical trials for a precision-engineered drug designed by AI. The drug in question is a treatment for obsessive compulsive disorder and was developed in less than 25% of the time that would have been expected of conventional techniques. Speeding up the phase to clinical trials is why AI drug discovery is of such interest to major pharmaceuticals groups and investors.

Exscientia has grown its revenues by 40% over the 18-months since it last brought in investment capital, has moved to the U.S. and has embarked upon the clinical development phase on a number of drugs discovery projects. The new cash will be used to bring more of its pipeline of drugs to clinical testing and expand its US operations, with additional international expansion also likely.

Exscientia’s founder and CEO, Professor Andrew Hopkins, comments:

“This investment highlights the increasing commitment to the potential of AI to transform drug discovery and the excitement that we have garnered around the innovative work we are doing at Exscientia.”

“We have now demonstrated multiple times that our platform can accelerate the time between the start of an idea and a viable new drug candidate for patients in need of treatments, fast tracking the entire R&D process.”

Robert Ghenchev, senior partner and head of Novo Growth, the growth equity arm of lead investors Novo Holdings, is to join the Exscientia board after the Series C round. He added:

“We see significant opportunity for the company to further grow its participation in the drug discovery ecosystem and are excited to work with the Exscientia team in realising this vision.”