Artificial intelligence firm twoXAR raises $10M for partnering drive

Artificial intelligence company twoXAR—a specialist in separating signals from noise in data-rich drug discovery projects—has raised $10 million in a first-round financing led by SoftBank Ventures.

Co-founder and CEO Andrew Radin says the proceeds will be used to bring forward preclinical drug candidates including candidates for diabetes, liver cancer and rheumatoid arthritis, build the pipeline with new partnering deals and spinouts, and add to its headcount. The company’s business model is to use its AI technology to identify promising drug candidates, validate them through preclinical studies and then work with partners to bring them into the clinic.

The Palo Alto, California-based company—which was the first investment for Silicon Valley entrepreneur Andreessen Horowitz’s $200 million biotech fund in 2015—already has some collaborations under its belt. In 2016, it signed deals with the Universities of Chicago and Stanford for drug discovery programs in atherosclerosis and liver disease, respectively, as well as Mount Sinai Medical in the area of diabetic neuropathy. The company also signed up Japanese drugmaker Santen for a glaucoma program last year.

“Traditionally, building a portfolio of drug programs requires hundreds of millions of dollars and takes many years in the biopharmaceutical industry,” says Radin in a blog post. “The convergence of available biomedical data, affordable cloud computing and advances in algorithms is now enabling companies to build these drug portfolios for an order of magnitude less money and in a fraction of the time it traditionally takes.”

The CEO says its twoXAR’s platform allows it to identify drug candidates quickly by teasing out new disease biology pathways, going from start to lead preclinical candidate in as little as three months.

We are not selling a tool or service to the biopharmaceutical industry—we are instead partnering our drug programs through typical therapeutic licensing-style deals consisting of upfronts, milestones and royalties reflecting the stage of the drug candidate,” he continues.

The Andreessen Horowitz Bio Fund and OS fund have also joined the series A along with SoftBank Ventures, and Radin says the investors “bring strong operational and global business development support to twoXAR as we continue to build our pipeline of drug programs.”

JP Lee, managing director at SoftBank Ventures, and Vijay Pande, Ph.D., general partner at Andreessen Horowitz, have joined twoXAR’s board following the investment round.