Generate Biomedicines Raises $370M Series B Funding

Investment Surge in Drug Development: Generate Biomedicines Secures $370 Million

The pharmaceutical industry continues to experience a significant influx of investment. Recently, Generate Biomedicines announced a substantial $370 million Series B funding round on Thursday, marking a major advancement for the company.

A Novel Platform Focused on Proteins

Generate Biomedicines is pioneering a platform-driven strategy for drug discovery, distinguished by its concentrated focus on proteins. This approach sets it apart in a competitive landscape.

The core concept driving Generate’s research is to move beyond simply identifying existing protein interactions. Instead, they aim to decipher the fundamental principles governing protein creation and function – essentially, understanding how proteins operate within the body.

CEO Mike Nally explained to TechCrunch that the ultimate ambition is to leverage this understanding to engineer entirely new proteins capable of performing a vast range of biological processes.

Progress and Capabilities

Over the past three years, the company has successfully translated these foundational principles into tangible results.

“We’ve been able to generate novel proteins across all protein modalities, and so that includes antibodies, peptides, enzymes and cell and gene therapy,” Nally stated, highlighting the breadth of their capabilities.

Backed by Flagship Pioneering

Generate Biomedicines is part of a growing network of companies nurtured by Flagship Pioneering, the venture firm also responsible for Moderna’s success. The company initially emerged from stealth in 2020 with a $50 million seed investment from Flagship.

This latest funding round represents Generate Biomedicines’ first major foray into external financing.

Investors in the Series B Round

The round included participation from Alaska Permanent Fund, Altitude Life Science Ventures, ARCH Venture Partners, funds and accounts advised by T. Rowe Price Associates, Inc., and further investment from Flagship Pioneering.

Industry Trends and Investment Landscape

Generate Biomedicines is benefiting from broader trends within the pharmaceutical sector. Venture capital investment in drug discovery nearly doubled from 2019 to 2020, reaching $16.2 billion.

Investment in AI-driven drug development has also experienced rapid growth, reaching $13.9 billion in 2020, a fourfold increase from 2019, according to a Stanford University report. Further funding reached $10.7 billion by August 2021, as reported by Signify Research.

While substantial, this round is comparable to recent funding for similar companies, such as Insilico Medicine’s $255 million Series C and Cellarity’s $123 million Series B.

The Rise of Therapeutic Proteins

Generate Biomedicines’ leadership attributes the size of the funding round to its innovative approach to protein biology and protein-based drug development.

Therapeutic proteins, especially monoclonal antibodies, are gaining an increasingly significant share of the drug market. In 2018, seven of the top ten best-selling drugs were monoclonal antibodies.

A 2020 report from Bioprocess International Magazine indicated that global sales of monoclonal antibodies have outpaced all other biopharmaceuticals over the past five years.

Expanding Applications of Monoclonal Antibodies

Monoclonal antibodies are widely recognized in oncology and immunology, but their applications are expanding. For instance, monoclonal antibodies developed by Eli Lilly to treat COVID-19 demonstrate the potential of therapeutic proteins.

Generate Biomedicines is focused on all protein types, but initially prioritizes antibody development, which currently accounts for approximately 60% of the protein-based biotherapeutics market.

Unlocking Protein Design Potential

The company’s focus on fundamental protein principles enables a unique level of customized protein design, according to co-founder and chief strategy innovation officer Molly Gibson.

Considering the vastness of possible protein combinations, Gibson explained that the proteins shaped by natural selection represent only a minuscule fraction of what is theoretically achievable.

“The amount of sequence space that nature has sampled through the history of life would equate to almost just a drop of water in all of Earth’s oceans,” she stated.

AI-Driven Protein Discovery

Generate Biomedicines utilizes artificial intelligence to identify potentially functional proteins that haven’t yet been discovered, rather than solely focusing on existing proteins.

Addressing Immunogenicity Challenges

Developing therapeutic proteins presents inherent challenges, as the immune system can sometimes reject novel proteins. Gibson asserts that the company’s technology can overcome this obstacle.

“In order to do this, we have developed a proprietary experimental approach to measure and ML approach to learn how proteins are recognized by the immune system, so we can ultimately avoid it,” she said.

Future Plans and Platform Potential

Generate Biomedicines envisions itself as both a drug developer and a platform provider. The company has several drug candidates in preclinical stages, targeting infectious diseases, oncology, and immunology, with a goal of initiating Investigational New Drug (IND) studies by 2023.

Nally believes the company’s greatest potential lies in its ability to streamline protein-based drug development for others. While partnerships are anticipated, no specific collaborations have been announced yet.

With the new funding, Generate Biomedicines plans to expand its workforce to 500 employees (currently at 80) and construct two new facilities to enhance its wet lab, machine learning, and data generation capabilities.