China AI biotech XtalPi lands $15M from Sequoia, Google, Tencent

XtalPi combines AI, quantum physics and cloud computing to predict drugs’ crystal structures more quickly and accurately. (UCSF)

As capital continues to pile onto applications of artificial intelligence in drug R&D, XtalPi, a Chinese startup working in that field, has secured a $15 million series B backed by high-profile tech investors Sequoia China, Google and Chinese internet giant Tencent.

“Xtal” is an abbreviation for “crystal” in academia, and Pi is π, which is used in many mathematics and physics formulas, company spokesperson Ruyu Wang told FierceBiotech. That unique name points to the company’s approach of combining artificial intelligence, quantum physics and cloud computing to predict drugs’ crystal structures more quickly and accurately.

A drug’s structure can significantly affect its potential safety, stability and efficacy, and XtalPi’s AI models can also help researchers predict other important characteristics for hit identification and lead optimization.

“At XtalPi, we believe that algorithmic power is the key to finding smarter, more effective routes for drug research and development, and we are focused on building a computational engine that empowers and expedites pharmaceutical innovation for companies worldwide,” said Shuhao Frank Wen, XtalPi’s co-founder and chairman, in a statement.

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To support XtalPi’s algorithms that require support from computing resources, XtalPi has built an elastic high-performance computing cluster across AWS, Tencent Cloud, Google Cloud, and Alibaba Cloud that can deploy up to 1 million cores within seconds, said Wang.

Founded in 2014 by a group of physicists at the Massachusetts Institute of Technology, the company has now grown to over 60 employees working at three locations in Cambridge, Massachusetts, and Shenzhen and Beijing in China. It is currently keeping mum about its customers but said that it has established strategic partnerships with several top international pharmaceutical companies.

Executives from both Tencent—which led XtalPi’s series A—and series B lead investor Sequoia China said in the statement that they have confidence in AI’s power in transforming the future of drug R&D and also in XtalPi’s team and technology. As for Google, it recently announced plans to launch an AI lab in China, its first such center in Asia, even though the search site is still blocked in the country’s mainland.

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The new money brings the total investment XtalPi has collected to $20 million. The company said it will use the proceeds to develop new computational models with big data generated from its computing platform and will also construct a prediction-driven research lab to enhance its capabilities for the screening and design of solid drugs.

A successful case in which AI brings a new drug from computer to market has yet to be seen, but the promise it holds has already helped a slew of AI-based drug R&D supporters garner handsome amounts of capital or pen deals with top biopharma companies. U.K. firm Exscientia, for example, inked drug discovery deals with Sanofi and GlaxoSmithKline on the back of each other in 2017, and got a €15 million investment from German CRO Evotec. Other companies like Berg, BenevolentAI, Insilico, Datavant and Owkin—just to name a few—have all capitalized on the biopharma industry’s growing interest in AI.