(Bloomberg) -- Insilico Medicine Inc. is considering an initial public offering after securing funding at a valuation of more than $1 billion, reflecting growing interest in the potential use of AI to discover ground-breaking new drugs.
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US-based Insilico, which has extensive operations in China, secured $110 million in a financing round led by Value Partners Group. Existing backers including Warburg Pincus, US biotech investor OrbiMed Advisors Llc and the venture arm of Eli Lilly & Co. participated, the company said in a statement.
Investor interest in generative AI startups has soared around the region since the emergence of China’s DeepSeek demonstrated advances made outside the US, Chief Executive Officer Alex Zhavoronkov told Bloomberg News. The Series E funding took Insilico’s valuation to well above $1 billion, he added.
Insilico and rivals like Atomwise Inc. and BenevolentAI aim to use AI to improve drug discovery, historically a time-consuming and costly process. It’s one of the fields AI optimists have been most enthusiastic about, though the concept has so far failed to live up to its early promise for drug development.
Insilico, which earns revenue from licensing assets in its pipeline to clients such as Fosun Pharma and Exelixis Inc., is considering an eventual listing but is no hurry to do so, Zhavoronkov said over a Zoom call, speaking from the US. It’s also struck agreements on drug discovery with Sanofi SA, Saudi Aramco Oil and others, with a contract value in aggregate of about $3.5 billion on which the company receives certain payments and royalty fees.
Insilico has filed for a Hong Kong IPO twice, in 2023 and again in 2024, though in both cases it let those applications lapse without proceeding to take investor orders for shares.
“We’re considering timing and listing options, primarily looking at Hong Kong,” he said. But “we’re under no pressure as we have extremely healthy revenues and can also comfortably raise a good amount of capital.”
Insilico wants to use its new capital to further develop its AI platform, and advance the clinical validation of its flagship drug candidate for idiopathic pulmonary fibrosis treatment. Rentosertib, developed for treating the progressive lung disease, has progressed through multiple clinical studies and completed Phase IIa clinical trials, the stage that focuses on safety, dosage and initial efficacy.