Healx Secures $47M in Funding for AI-Powered Platform Targeting Rare Disease Drug Discovery

Healx, a pioneering AI-driven startup based in the U.K., specializing in identifying new treatment possibilities for rare diseases, has successfully garnered $47 million through a Series C investment round. The funding initiative was jointly spearheaded by Atomico from Europe and R42 from Silicon Valley.

Additionally, the startup announced its approval to initiate Phase 2 clinical studies in the United States for an innovative drug later in the year.

Positioning itself as a revolutionary “drug discovery pipeline”, Healx excels in uncovering obscure links between existing chemical entities (like various drugs and pharmaceuticals in different stages of development) and rare diseases. This is achieved through aggregating an extensive variety of public and proprietary data, encompassing biomedical information, disease and biochemical data, clinical research, and patents, culminating in a comprehensive “biomedical knowledge graph” centered around rare diseases.

“Leveraging our AI technology and a dedicated team, we unveil novel insights into disease biology and pair these findings with appropriate small molecules,” shared Healx’s co-founder and CEO Tim Guilliams with TechCrunch. “Our team focusing on digital biology concentrates on demystifying complex disease signatures. Simultaneously, our digital chemistry group applies AI to find matches for these signatures with chemicals, small molecules, and drugs through approaches like virtual screening and generative chemistry,” Guilliams added.

While traditional pharmaceutical companies often adhere to a linear “one disease, one target, one drug” model for drug discovery, Healx leverages the power of AI to analyze countless data points across drugs and diseases. This approach enables the identification of new connections for drug repurposing, a strategy significantly more time-efficient and potentially less prone to failure than conventional methods.

Healx was conceived in Cambridge in 2014 by Guilliams, who holds a PhD in biophysics and neuroscience from the University of Cambridge, and the company’s chairman, David Brown. Brown, a former global head of drug discovery at Roche, is also recognized for co-inventing the widely known erectile dysfunction medication, Viagra.

Designing Drugs

Armed with the newly acquired $47 million, Healx is set to commence a Phase 2 clinical trial for a groundbreaking treatment it has developed for Neurofibromatosis Type 1 (NF1), a genetic condition associated with tumor development on nerve tissue. Although NF1 is a rare condition, it is among the more prevalent genetic disorders, affecting roughly 1 in 3,000 people. These tumors, primarily benign, can lead to complications involving the skin, eyes, and nervous system and have the potential to become malignant.

Previously, Healx had been granted Investigational New Drug (IND) approval by the FDA in 2021 for Fragile X syndrome, and it is actively exploring early AI-driven or pre-clinical stages for treatments encompassing oncology, renal, and neurological conditions.

The anticipated Phase 2 trial of Healx’s leading NF1 candidate, known as HLX-1502 and administered orally, targets young adults with NF1 and inoperable plexiform neurofibromas, a particular tumor variant associated with NF1.

HLX-1502 was identified through the repurposing of an already developed drug, never before released in the U.S., now undergoing reformulation by Healx. This strategy, supported by pre-existing safety data from initial tests on healthy individuals, enhances the confidence in the drug’s safety profile — a significant factor given Healx’s focus on diseases often characterized by benign tumors in otherwise healthy individuals.

“In the realm of cancer treatments, you’ll find therapies that indiscriminately attack all cells, leading to severe side effects,” explained Guilliams. “However, for patients with the benign variant who might live for decades, subjecting them to aggressive cancer medications for extended periods doesn’t make sense due to the pronounced side effects.”

Healx utilizes its technology to explore a vast array of underdeveloped drugs and those shelved for various reasons, yet with sufficient data to warrant further investigation for new applications.

“With access to hundreds of thousands of compounds and small molecules, the patterns and predictions provided by AI guide us in selecting the most promising drug candidate with the lowest associated risks. We sought a solution that specifically targets the nerves, anticipating minimal side effects,” Guilliams added.

A pivotal question arises regarding the ownership of HLX-1502, given its development from previous research. Guilliams clarifies that Healx has secured patents for HLX-1502’s application in treating NF1 and other nerve-related conditions, with the FDA granting the drug “new product exclusivity” in the American market. This designation is typically reserved for innovative drugs or those representing significant advancements over existing treatments.

The Business of Pharmaceuticals

Prior to this financing round, Healx had raised approximately $68 million, primarily through a $56 million Series B round in 2019. The company also benefits from an investment partnership with the Children’s Tumor Foundation (CTF), which commits to funding Healx’s clinical trials through “milestone-driven payments.”

It’s noteworthy that the amount raised in the Series C round is $9 million less than the previous Series B round. Despite this, trials, particularly those in the clinical phase, remain the most capital-intensive aspect of Healx’s operations—an area it is just beginning to delve into with its NF1 research.

In light of economic downturns and challenging market conditions, Healx had to streamline its operations, focusing on core strengths and enhancing efficiency. This strategic shift, alongside advancements in generative AI, has allowed the company to optimize its use of resources.

Despite the funding challenges faced by deep tech and biotech ventures, Healx’s successful Series C round highlights investor confidence in the company’s innovative approach and technological prowess.

As the pharmaceutical industry continues to evolve, Healx stands at the forefront of AI-enabled drug discovery, aiming to make significant strides in the treatment of rare diseases and beyond.