Alphabet Spinoff Isomorphic Labs Reported in Talks to Raise Funds at Up to $50 Billion Valuation
Isomorphic Labs is reportedly in early talks to raise a round at a $40 billion to $50 billion valuation, as it markets its IsoDDE drug-discovery AI and partnerships with Eli Lilly, Novartis and Johnson & Johnson.
The report, published Oct. 8, did not give the size of the round. The people cited by Bloomberg also did not identify the investors expected to back the deal.
Isomorphic's flagship product is an AI platform called IsoDDE, built to speed up the manual research work involved in developing a new therapy. Several of its functions focus on automating the search for binding pockets, which is among the harder tasks in drug development.
Drugs typically neutralize disease-causing cells by attaching to a specific point on the cell surface, known as a binding pocket. Locating a suitable one is slow and complicated: cell surfaces are highly complex and can only be mapped with specialized microscopes, and they change regularly, so the pockets they contain change as well. In some circumstances binding pockets disappear altogether.
In February, Isomorphic said IsoDDE identified binding pockets more than 50% better than the closest competing tool. The platform can also map protein-ligand complexes, the molecular structures formed when a drug attaches to a binding pocket on a disease-causing cell.
AlphaFold, the Google DeepMind model whose creators shared half of the 2024 Nobel Prize in chemistry, can predict protein-ligand complexes as well. Isomorphic says IsoDDE performs that task about twice as accurately. Binding pockets are targeted by antibodies as well as drugs, and modeling those interactions is particularly difficult because antibodies vary structurally in ways that are hard to predict; according to Isomorphic, IsoDDE models such interactions about 2.3 times better than AlphaFold.
Isomorphic earns revenue from its technology through research partnerships with pharmaceutical companies. In 2024 it signed deals worth nearly $3 billion with Eli Lilly and Co. and Novartis AG, and in January it began a similar collaboration with Johnson & Johnson. All three partnerships center on small molecules, the biological building blocks that form the basis of many drugs.
Isomorphic's most recent raise, a $2.1 billion round announced in March, drew contributions from Alphabet, two of the search giant's venture capital funds and several outside backers. The company has not commented on the reported talks.