In this week’s edition of InnovationRx, we look at the opportunities and challenges of using AI to personalize healthcare and speed up clinical trials, the future of genetic medicine, another big Lilly acquisition, and more. To get it in your inbox, subscribe here.
This week, more than 14,000 people convened in Las Vegas for the annual Adobe Summit. Not surprisingly, a lot of the conversations at the conference were centered on AI – including one panel discussion focused on how the technology can be used to personalize healthcare delivery.
This is a priority for healthcare because “unlike other industries, in healthcare your journey is like no other’s because your biology is like no other’s,” said Blue Shield of California CMO Jigar Shah.
But the industry has been slower to adopt technology, suggested Tory Smithe, who leads digital strategy for healthcare at Adobe, because of regulation, siloed systems and legacy technologies, which have made companies more conservative about digital transformation. Shah said that one way healthcare systems can overcome that inertia is to see regulation as being aligned to serve patients. “The intent behind regulation is to protect the consumer,” he said. “So if you accept that, then you see it as a springboard,” he added, citing Blue Shield’s implementation of price transparency before it became a regulatory mandate.
Another benefit of AI and new technologies, said Lesley Spellmeyer, who manages personalization for Lilly, is that they allow healthcare companies to be more proactive in providing information to both patients and providers. “Doctors are people, and they go to Amazon,” she said, which means that healthcare companies should provide the same kind of seamless experiences. Shah agreed with that sentiment and highlighted an initiative by Blue Shield in this regard: its app can alert consumers when their doctor prescribes a drug, letting them know if there are similarly effective medications available at a better price to avoid sticker shock at the pharmacy.
Even with the advantages AI provides, the participants noted that it’s not a panacea, and it needs to be implemented–or not–in ways that maintain the trust of patients and doctors. Amanda Todorovich, who manages Cleveland Clinic’s expansive collection of articles on medical conditions and treatments, said that while AI has helped scale some of its production, it doesn’t use it at all to generate content or images. “We don’t publish a single thing without medical review,” she added.
The panelists all agreed that one key aspect of keeping trust was ensuring there was a human face, and that when it comes to healthcare information, doctors are the best source. “Leading with your clinicians and leading with that voice will help build trust and help with the receiving of the information,” Smithe said.
This $1.8 Billion Startup Is Betting AI Can Get Drugs Through Clinical Trials Faster
Ben Liu
Guerin Blask for Forbes
When Benjamine Liu was a young computational biologist working on his doctorate at the University of Oxford, he had some ideas for novel drugs to treat Alzheimer’s. He was so excited by their promise that he tried shopping them around to a few pharmaceutical companies. Not a single one was interested.
“They said, ‘We have more drugs than we can afford to develop,’” Liu tells Forbes. “A discovered drug isn’t worth that much.”
That rejection led him to a realization: The biggest problem in drug R&D wasn’t in the sexy part of searching for discoveries. Instead, it was the long, grueling, expensive process of clinical development, where most potential drugs fail.
In fact, while there was a nearly twofold increase in drug candidates in the last decade, the number of drugs approved by the FDA, at around 50 per year, hasn’t changed much, he says now. And that, Liu figured, is something AI is uniquely suited to help with. So in 2016, Liu, now 36, teamed up with Linhao Zhang, 34, a computer scientist who had worked on the engineering team at Oscar Health, to start Formation Bio to help pharma companies do their clinical trials better and faster.
Today, Liu is chasing a bigger goal: Buying a portfolio of 10 early-stage drug candidates, many of which failed or stalled out in early-stage clinical trials, and then using AI to help get them back on track. Some of the world’s top investors are betting on Liu’s vision, including Andreessen Horowitz, Sequoia, Thrive Capital, Kleiner Perkins’ chairman John Doerr and OpenAI’s Sam Altman. It has raised $615 million at a $1.8 billion valuation. Forbes estimates that Liu’s stake is worth more than $150 million, while Zhang’s is worth above $100 million.
“It has the potential—the potential—of being one of these enormously significant companies in an industry whose apple cart has not been upset all that much by a young company started in the last 10 or 15 years,” says Michael Moritz, the billionaire venture capitalist and former Sequoia chairman, who wrote the first check in the business.
Breakthrough Prize Winner Katherine High On The Future of Genetic Medicine
Katherine High was one of the recipients of the $3 million Breakthrough Prize in Life Sciences last week, joining co-winners Jean Bennett and Albert M. Maguire for their work in developing and commercializing voretigene neparvovec (marketed as Luxturna), the first FDA-approved gene replacement therapy. The money for the awards comes from the Breakthrough Prize Foundation, founded by Yuri and Julia Milner, as well as from Mark Zuckerberg, CEO of Meta, and Priscilla Chan; Google cofounder Sergey Brin and 23andMe cofounder Anne Wojcicki.
Luxturna is a treatment for a genetic disorder called Leber congenital amaurosis, a rare disease that usually results in total blindness by early adulthood. Patients who’ve used it can maintain a significant portion of their vision. “I think most people who do this kind of work don’t do it for the prizes. Of course, it’s very nice to be recognized,” she told Forbes, adding that “when I look at the list of previous winners, I feel pretty humble.”
Luxturna won its FDA approval under Spark Therapeutics, which High cofounded and where she served as president and chief scientific officer. The company was sold to Roche in 2019 for $4.3 billion. Now she has a new venture, RhyGaze, which is developing gene therapies for other vision disorders. She also sits on the board of CRISPR Therapeutics, which developed a gene therapy for sickle cell disease in collaboration with Vertex Pharmaceuticals.
High said she’s very optimistic about the next decade of genetic medicines, which she believes will help more people as doctors and hospitals become better equipped to administer them. She acknowledged, though, that they face challenges with payment models, since these one-time cures may entail high upfront costs. Still, she said, as more treatments are developed and the healthcare system works out these issues, they will offer a great deal of hope for people with inherited diseases.
“They allow the patient to not only move toward a different state of health that is more like normal, they also allow you to leave your genetic disease behind,” she said, adding that “in that sense, it’s really transformative.”
Deal of the Week
In its fifth acquisition of the year, pharma giant Eli Lilly is buying genetic medicine company Kelonia Therapeutics for an upfront payment of $3.25 billion, plus milestone payments, making the deal potentially worth $7 billion. Kelonia is developing a CAR-T treatment for multiple myeloma that reprograms a patient’s own immune cells to kill cancerous ones. What’s different about the company’s approach is that this happens in vivo–within the person’s body–whereas with conventional CAR-T therapies, the cells have to be removed and then infused back. Last December, Kelonia presented early clinical trial data showing promising responses to treatment. This is the second company in the in vivo CAR-T space that Lilly plans to purchase this year. It also acquired Orna Technologies–which is developing treatments for other cancers and autoimmune diseases with the same technology–in February for up to $2.4 billion.
WHAT WE’RE READING
In case you missed it, Forbes published its eighth annual AI 50 list, with sponsoring partner Mayfield, that highlights the most promising privately held AI companies in the world. There’s a lot of familiar names, like Anthropic, Harvey and ElevenLabs, but this year Forbes has also highlighted some exciting newcomers, including presentation builder Gamma, drug discovery startup Chai Discovery and New York-based Rogo, which is building AI for bankers and investors. We also launched our first ever AI 50 Brink list, featuring early stage companies with the potential to rival their more established peers in the future.
Stocks in biotech companies developing psychedelic medicines surged after President Trump signed an executive order geared towards accelerating research and regulatory approval of such treatments.
Next-gen obesity drug developer Kailera nets $625 million in one of biotech’s biggest IPOs, and sees its stock rise more than 60% in the first day of trading. Forbes profiled Kailera last year.
Korea’s biotech sector is churning out new fortunes from weight loss pills, novel cancer drugs and more.
Researchers are learning more about vertigo and how to treat it.
Merck is partnering with Google Cloud to implement agent AI across the pharma giant’s business in a deal worth up to $1 billion.
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