Healx Secures $47M for AI-Driven Drug Discovery in Rare Diseases

Healx, a UK-based AI-driven drug discovery startup, has secured $47 million in a Series C funding round co-led by Atomico from Europe and Silicon Valley-based R42. This funding will support the company's ongoing efforts to develop new treatments for rare diseases. Additionally, Healx has received regulatory clearance to commence Phase 2 clinical trials in the U.S. for a new drug later this year.

Innovative Drug Discovery Approach

Healx positions itself as a "drug discovery pipeline," utilizing AI to identify connections between existing chemical compounds and rare diseases. By integrating public and proprietary data sources, including biomedical literature, clinical trials, and patents, Healx creates a comprehensive "biomedical knowledge graph" of rare diseases.

AI-Powered Drug Discovery

"Our AI platform and expert teams enable us to identify and discover novel disease biology and match it with suitable small molecules," said Tim Guilliams, co-founder and CEO of Healx. The company's digital biology team deciphers complex biological disease signatures, while the digital chemistry team uses AI techniques such as virtual screens and generative chemistry to match these signatures with appropriate chemicals and drugs.

Addressing Traditional Drug Discovery Challenges

Traditional pharmaceutical companies often follow a "one disease, one target, one drug" approach, which is time-consuming and prone to high failure rates. Healx's AI-driven method analyzes millions of drug and disease data points simultaneously to uncover previously undetected connections, potentially leading to new treatments using known compounds.

Founders and Background

Founded in 2014 by Tim Guilliams and David Brown in Cambridge, Healx leverages the founders' extensive expertise. Guilliams holds a PhD in biophysics and neuroscience from the University of Cambridge, while Brown, known for co-inventing Viagra, previously served as the global head of drug discovery at Roche.

Advancing Clinical Trials for NF1

With the new funding, Healx is preparing to launch a Phase 2 clinical trial for HLX-1502 (a tablet taken orally), a novel treatment for neurofibromatosis Type 1 (NF1). NF1, a genetic disorder affecting 1 in 3,000 individuals, causes tumor growth on nerves. The trial, focusing on young adults with inoperable plexiform neurofibroma, is set to begin by the end of 2024.

Reusing Existing Drugs

HLX-1502 was developed from an existing drug repurposed for neurofibromatosis Type 1 (NF1). This approach leverages existing safety data from previous testing, increasing confidence in reduced side effects. Healx focuses on diseases involving benign tumors in otherwise healthy patients, aiming to minimize side effects compared to traditional cancer treatments.

AI-Driven Drug Selection

Healx's technology evaluates numerous existing drugs and compounds, identifying patterns and predictions to select the most promising candidates. "AI helps us to find the best possible drug for a particular disease biology," Guilliams explained, emphasizing the goal of targeting the nerve with fewer side effects.

Intellectual Property and Regulatory Exclusivity

Healx holds patents for HLX-1502 for treating NF1 and other nerve-related diseases, with the FDA granting new drug product exclusivity in the U.S. This designation is typically reserved for innovative drugs or significant changes to existing products.

Investment History and Recent Developments

Prior to this round, Healx had raised approximately $68 million, including a $56 million Series B round in 2019. The company recently secured investment from the Children's Tumor Foundation (CTF), which will provide milestone-driven payments to support clinical trials.

Challenges and Market Conditions

Healx's Series C round is $9 million less than its Series B round, reflecting recent economic downturns. The company streamlined operations and reduced its headcount by roughly 45% last year to adapt to the challenging market conditions. Despite these challenges, Healx's latest funding round was oversubscribed, highlighting investor confidence in its approach and technology.

Future Prospects and Expansion

Healx is expanding its presence in the U.S. as it prepares for clinical trials. While it may take several years before new drugs reach the market, the company's advancements in AI have enhanced capital efficiency, enabling significant progress with fewer resources.

Industry Context and Competitive Landscape

Healx's funding comes amid significant investments in AI-driven drug discovery platforms, including Formation Bio and Xaira. Despite raising less capital, Healx focuses on quality programs with high potential, targeting a $16 billion market for NF1 and related diseases.

Conclusion

Healx's innovative AI-driven approach to drug discovery for rare diseases continues to gain traction with substantial funding and regulatory support. The company's commitment to leveraging existing compounds and minimizing side effects positions it as a promising player in the field. With ongoing clinical trials and a strong focus on AI advancements, Healx is poised to make significant contributions to the treatment of rare diseases.