❯ Isomorphic Labs is reportedly in talks for new funding at a $40 billion to $50 billion valuation

A valuation before a deal sizeAccording to SiliconANGLE, citing a Bloomberg report on October 8, Alphabet spinoff and AI drug discovery company Isomorphic Labs is in talks for a new funding round at a valuation of $40 billion to $50 billion. The talks are at an early stage, and neither the size of the round nor the investors have been disclosed.

Finding where a drug can landIsomorphic’s flagship product is IsoDDE, an AI platform that speeds up the manual research steps in developing a therapy. A drug usually has to attach to a specific point on a disease-causing cell, known as a binding pocket, and finding one is slow and difficult. The company said in February that IsoDDE was more than 50% better at finding binding pockets than the closest competing tool and about twice as accurate as AlphaFold at predicting how a drug and its target fit together.

Revenue from drugmaker partnershipsThe company earns money through research partnerships with drugmakers. In 2024 it signed deals worth nearly $3 billion with Eli Lilly and Novartis, and this January it launched a similar collaboration with Johnson & Johnson; all three focus on small molecules. Its last raise, a $2.1 billion round announced in March, included Alphabet, two of its venture funds and several outside backers.

Valuation running ahead of the medicineOnly a little over six months separate the $2.1 billion round in March from the tens of billions now being discussed. Investors are betting that platforms like IsoDDE can sharply cut the time needed to screen drug candidates; for partners such as Lilly, Novartis and J&J, the more capital favors the platform, the harder it becomes for latecomers to get the same terms.

▮ SIGNALAI drug discovery is now valued on the scale of early rounds at leading model companies, but its proof arrives on the timetable of clinical trials, which will test investors’ patience far longer than software does.