Shenzhen-based Xtalpi, an AI-powered drug discoverer, announced Tuesday it has partnered with U.S. pharmaceutical giant Eli Lilly in a deal worth up to $250 million to unearth potential medicines for an undisclosed disease.
Xtalpi said the drug candidates will target a disease that currently has no medicine available. Under the collaboration, Xtalpi is set to deliver a novel drug compound, which Eli Lilly will pursue clinical trials and commercialization, according to a statement.
“With a closed loop of AI and quantum physics algorithms working in sync with the data factory of large-scale robotics experiments, Xtalpi is uniquely equipped to tackle challenging novel targets,” cofounder and CEO Ma Jian said in a statement. “We are honored that [Eli] Lilly has chosen Xtalpi as a partner in achieving more fruitful pharmaceutical innovation and bringing much-needed treatments to patients worldwide.”
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Xtalpi was cofounded by Ma, Wen Shuhao and Lai Lipeng—three Chinese quantum physicists from the Massachusetts Institute of Technology—in 2014. It seeks to speed up the drug discovery process and success rate by using AI, quantum physics and robotic automation. Besides its headquarters in Shenzhen, the company has an office in Boston, the U.S.’s biggest biotech hub, with research centers in Beijing and Shanghai.
Xtalpi said it serves more than 200 pharmaceutical companies worldwide. Its partners range from global leaders like Johnson & Johnson’s Janssen Pharmaceuticals and Pfizer, to domestic players including Chia Tai Tianqing Pharmaceutical Group (a subsidiary of Chinese billionaire Tse Ping’s Sino Biopharmaceutical), as well as CK Life Sciences, the biotech arm of Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings. Xtalpi has helped Pfizer to speed up the formulation of Paxlovid, the first oral Covid pill approved by the U.S. Food and Drug Administration.
Xtalpi has reportedly raised about $400 million at a valuation of approximately $1.9 billion from new and existing investors nearly two years ago, Bloomberg News reported. The nine-year-old company announced in 2020 that it had secured $319 million in a round led by SoftBank’s Vision Fund 2, PICC Capital and 5Y Capital, a spinoff from Hong Kong property tycoon Ronnie Chan’s Morningside Group. Its other backers include Chinese billionaire Neil Shen’s Sequoia China, Forbes Midas Lister Anna Fang’s ZhenFund, American billionaire Jeff Yass’s Susquehanna International Group, Tencent and Google.
According to the International Financing Review in April, Xtalpi was considering an initial public offering in Hong Kong via the newly introduced listing rules for specialist technology companies. Xtalpi declined to comment on the report.
Last year, AI-powered biotech startup Insilico Medicine, based across the border in Hong Kong, raised $60 million in Series D funding from investors including Singapore billionaire Eduardo Saverin’s B Capital Group, private equity giant Warburg Pincus and Midas Lister Nisa Leung’s Qiming Venture Partners. Sequoia China is also an investor in Insilico Medicine, which raised more than $360 million in total funding.
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