AI drug discovery startup Isomorphic Labs, which spun out of Google DeepMind, saw its research and development costs rise more than four times in 2023.
The UK-based company — which has developed an AI drug discovery platform for the pharma and biotech industries and is a subsidiary of Google’s parent company Alphabet — saw its R&D spend hit £49m, rising from £12m in 2022, according to its latest company accounts.
Isomorphic Labs reported no turnover for the year but did make an operating income of $583k from the inking of two partnerships worth up to $2.9bn with pharma giants Eli Lilly and Novartis in Q4 last year — announced early in 2024.
Staff costs also rose, from £7m in 2022 to £20m last year as headcount rose from 43 to 71. In total, loss for 2023 after tax was £60m — up from £17m the previous year.
While revenue was close to nil in 2023, 2024 is looking more fruitful. The deal with Lilly paid Isomorphic $45m upfront with another $1.7bn to be paid when the company reaches certain milestones, while the Novartis contract was worth $37.5m upfront and a possible $1.2bn further down the line.
Isomorphic Labs raised £182m from its immediate holding company in August — a US-based entity owned by Alphabet.
It comes as another of Alphabet’s AI companies, Google DeepMind, has upped investment in employee wages as Big Tech companies vie for AI supremacy. Administrative expenses at DeepMind rose from £1bn to £1.4bn in 2023 — after falling the previous year — which the company said was driven by an increase in staff costs in its financial accounts.
AI drug discovery
Isomorphic Labs, which spun out in 2021, is looking to halve the time it takes to find new medicines — a process that can last more than a decade and cost pharmaceutical companies billions of dollars.
Earlier this year, CEO and founder of Isomorphic Labs Demis Hassabis — who also serves as DeepMind’s chief executive and cofounder and was awarded the Nobel Prize in Chemistry 2024 — told the Financial Times he hopes the company can reduce the drug discovery stage that comes before pre-clinical trials from an average of five years to two.
The company has built a platform based on DeepMind’s breakthrough AlphaFold technology that can recommend which potential molecule combinations will have the intended result on the body in a prospective new drug.
There have been technological advances this year, too. In May, Google announced that Isomorphic and DeepMind had developed AlphaFold 3 — a new AI model that it said could predict the structure of “proteins, DNA, RNA [and] ligands” and how they’d interact with other molecules with greater accuracy than previous models.
Big Tech’s AI bets
Big Tech companies upped their capital spending by 50% to more than $100bn in the first half of 2024 as they race to build AI infrastructure. Spending will only be going one way, with Amazon, Microsoft, Google, Meta, and Apple forecast by some industry experts to spend $1tn on assets like data centres to support AI moves over the next five years.
Investment giants like SoftBank have also been looking to bolster their AI arsenals, leading autonomous vehicles company Wayve’s $1bn Series C and acquiring chip startup Graphcore.
Read the orginal article: https://sifted.eu/articles/deepmind-ai-drug-discovery-spinout-isomorphic-labs-quadruples-rd-spend-as-alphabets-ai-companies-double-down/
