The same week that BenevolentAI announced it was cutting 30% of its staff, AI-focused biotech Xaira Therapeutics debuted with a $1 billion funding round with little precedent in healthcare over the past year — or beyond that. A survey of the biggest fundraising rounds over the past year revealed that the absolute largest investments were attracted by sectors such as semiconductors (China-based Changxin New Bridge — $1.99B and GTA Semiconductor — $1.86B), data centers (Vantage Data Centers — $6.4B in equity investment), AI (Inflection AI — $1.3B) and automotive (Leapmotor — $1.6B). But in healthcare, Xaira’s $1 billion in fundraising is one of the largest in recent memory — with the $3B emergence of Altos Labs in early 2022 being one exception.
Support from high places
Arch Venture Partners and Foresite Capital co-led Xaira Therapeutics’s $1 billion funding round. The San Francisco-based company, with former Genentech chief scientific officer and Denali Therapeutics co-founder Marc Tessier-Lavigne at the helm, aims to leverage AI for drug discovery and development.
Xaira’s board boasts an all-star lineup of industry veterans, including former FDA Commissioner Scott Gottlieb, Nobel laureate Carolyn Bertozzi and former Johnson & Johnson CEO Alex Gorsky. The investment in Xaira is Arch Venture Partners’ largest in its 39-year history.
Investor confidence amidst leadership scandal
The Xaira saga is not without controversy, given that Marc Tessier-Lavigne, the former president of Stanford University, was implicated in a research misconduct scandal. The allegations of research misconduct related to several papers he co-authored in the early 2000s. Some of those were retracted. While a scientific panel scientific panel concluded that while Tessier-Lavigne “did not personally engage in research misconduct for any of the twelve papers about which allegations have been raised,” it did find “serious flaws” in the presentation of data in five key papers in which he was the principal author. The panel noted “apparent manipulation by others” in at least four of these. The panel criticized his oversight, saying that while the lab culture had “many positive attributes,” there was “unusual frequency of manipulation of research data and/or substandard scientific practices from different people, at different times,” concluding that “there may have been opportunities to improve laboratory oversight and management.” Ultimately, Tessier-Lavigne resigned in July 2023, acknowledging that Stanford “needs a president whose leadership is not hampered” by these issues, as reported by STAT.
A Xaira spokesperson noted that Tessier-Lavigne was “explicitly exonerated by the Scientific Panel regarding allegations of scientific misconduct and falsification of data. Not only was he cleared of misconduct, but the panel also noted that no ‘reasonable scientist’ in his position could have been expected to detect the misconduct.” The spokesperson also noted that Dr. Tessier-Lavigne pursued corrections “in each instance when he was made aware of any issues affecting the data in his papers.” In one instance, “the journal (Cell) declined to publish a correction, because they deemed it unnecessary.” In another, he “sent multiple emails seeking a correction but never received a response from the journal.” The current editor in chief later admitted that the journal “dropped the ball” on the correction and that Tessier-Lavigne should not be faulted for the failure to publish a correction.
Robert Nelsen of ARCH Venture Partners, which incubated Xaira, said he specifically sought out Tessier-Lavigne to lead the company and that he had the support of investors, some of whom said they would only back Xaira if Tessier-Lavigne was at the helm, according to Bloomberg.
Out of the gate, Xaira’s already outfunded many prominent private healthcare companies
Based on an analysis of more than 100 of the top-funded healthcare companies that have received funding in the past year, Xaira has considerably more funding than the average funding amount of $270,299,000. Notable companies in the assessment included Freenome ($1.4B), a biotech focused on early cancer detection through blood tests using ML; ElevateBio ($1.2B), a cell and gene therapy technology company and Biosplice Therapeutics ($778M), which specializes in novel therapeutics based on alternative splicing for major diseases including cancer and osteoarthritis.
The launch of Xaira Therapeutics with a massive $1 billion funding round as the biotech sector continues to shed thousands of jobs (including at AI-focused biotechs like BenevolentAI), underscores the unwavering belief many top investors and industry leaders still have in AI’s potential to transform drug discovery.
| Company | Description | Industries | Headquarters | Founded | Total Funding (USD) |
|---|---|---|---|---|---|
| Altos Labs | Altos Labs focuses on cellular rejuvenation programming to restore cell health and resilience, to reverse disease to transform medicine. | Biopharma, Biotechnology, Health Care, Health Diagnostics, Medical | San Francisco, California, United States | 2021 | $3,000,000,000 |
| Resilience | Resilience provides end-to-end biopharmaceutical manufacturing and development solutions. | Biopharma, Biotechnology, Health Care, Life Science, Pharmaceutical | La Jolla, California, United States | 2020 | $2,515,000,000 |
| Grail | Grail develops a pan-cancer screening test designed to detect cancers at an early stage. | Biotechnology, Health Care, Health Diagnostics, Medical, Medical Device | Menlo Park, California, United States | 2016 | $2,004,655,040 |
| Caris Life Sciences | Caris Life Sciences is a molecular science company that offers molecular profiling, tissue-based profiling, and testing services. | Biopharma, Biotechnology, Health Care, Life Science | Irving, Texas, United States | 1996 | $1,690,000,000 |
| Intarcia Therapeutics | Intarcia Therapeutics develops therapies for diseases that require long-term chronic treatment. | Biotechnology, Health Care, Health Diagnostics, Medical Device, Personal Health | Hayward, California, United States | 1997 | $1,683,530,937 |
| Theranos | Theranos is a biotech company that claims to develop a technology that facilitates the early detection and prevention of disease. | Biotechnology, Consumer, Health Care, Health Diagnostics | Palo Alto, California, United States | 2003 | $1,368,500,318 |
| Freenome | Freenome is a biotechnology company with a comprehensive multiomics platform for cancer detection using a routine blood draw. | Biotechnology, Health Care, Health Diagnostics, Personal Health | South San Francisco, California, United States | 2014 | $1,351,550,000 |
| Tempus | Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. | Artificial Intelligence (AI), Biotechnology, Health Care, Machine Learning, Medical, Precision Medicine | Chicago, Illinois, United States | 2015 | $1,345,000,000 |
| ElevateBio | ElevateBio is a biotechnology company that specializes in cell and gene-based therapies. | Alternative Medicine, Biotechnology, Information Technology | Waltham, Massachusetts, United States | 2017 | $1,246,000,000 |
| Click Therapeutics | Click Therapeutics delivers safe and effective digital treatments to patients in need. | Biotechnology, Health Care, Medical Device, Pharmaceutical, Therapeutics | New York, New York, United States | 2012 | $946,382,500 |
| HeartFlow | HeartFlow is a medical technology company that provides various methods of diagnosis and treatment of cardiovascular disease. | Artificial Intelligence (AI), Biotechnology, Health Care, Health Diagnostics, Medical | Mountain View, California, United States | 2010 | $792,722,908 |
| XtalPi | XtalPi is a pharmaceutical technology company that is reinventing drug discovery by enabling dry lab predictions with wet lab validation. | Artificial Intelligence (AI), Biotechnology, Pharmaceutical | Cambridge, Massachusetts, United States | 2014 | $786,401,703 |
| Biosplice Therapeutics | Biosplice Therapeutics is in the medical research and development for tissue-level regeneration. | Biotechnology, Health Care, Life Science | San Diego, California, United States | 2008 | $778,000,000 |
| Eikon Therapeutics | Eikon Therapeutics is a biopharmaceutical company that develops live-cell resolution microscopy and engineering for drug discovery. | Biotechnology, Health Care, Life Science, Medical | Hayward, California, United States | 2019 | $772,000,000 |
| Rakuten Medical | Rakuten Medical is a biotechnology company that develops precision, cell-targeting investigational therapies. | Biotechnology, Health Care, Medical, Service Industry, Therapeutics | San Diego, California, United States | 2010 | $737,591,700 |
| Auris Health | Auris Health engages in the development of robotics technology for medical applications. | Biotechnology, Health Care, Medical, Medical Device, Robotics | Redwood City, California, United States | 2007 | $733,296,837 |
| InSightec | InSightec develops and manufactures MR-guided ultrasound technology devices for image-guided acoustic surgery. | Biotechnology, Health Care, Manufacturing, Medical Device, Therapeutics | Tirat Carmel, Hefa, Israel | 1999 | $732,900,000 |
| Generate Biomedicines | Generate Biomedicines is a biotechnological company focusing on creating breakthrough medicines. | Biotechnology, Health Care, Medical, Product Research | Somerville, Massachusetts, United States | 2018 | $693,000,000 |
| Neuralink | Neuralink develops a brain machine interface that provides solutions for those with paralysis. | Biotechnology, Medical, Neuroscience, Robotics | Fremont, California, United States | 2016 | $686,241,676 |
| RefleXion Medical | RefleXion Medical is a developer of biologically-guided radiotherapy systems for patients with cancer. | Biotechnology, Health Care, Medical, Medical Device, Therapeutics | Hayward, California, United States | 2009 | $675,100,000 |
| Insitro | Insitro is a drug discovery and development startup that utilizes machine learning and biology to transform drug discovery. | Biotechnology, Health Care, Life Science, Machine Learning, Pharmaceutical, Therapeutics | South San Francisco, California, United States | 2018 | $643,000,000 |
| Nimbus Therapeutics | Nimbus Therapeutics uses computational technology to create selective small molecule therapeutics. | Biotechnology, Health Care, Therapeutics | Boston, Massachusetts, United States | 2009 | $637,000,000 |
| Mevion Medical Systems | Mevion Medical Systems develops radiation therapies for the treatment of cancer. | Biotechnology, Health Care, Therapeutics | Littleton, Massachusetts, United States | 2004 | $627,320,853 |
| Kriya Therapeutics | Kriya Therapeutics is a biopharmaceutical company that develops gene therapies for ophthalmology, neurology, and metabolic diseases. | Biotechnology, Health Care, Life Science | Palo Alto, California, United States | 2019 | $600,500,000 |
| Impulse Dynamics | Impulse Dynamics is a medical device company offering innovative solutions for the treatment of chronic heart failure. | Biotechnology, Hospital, Medical, Medical Device | Marlton, New Jersey, United States | 1996 | $543,635,181 |
Filed Under: Biotech, machine learning and AI
