AI-Driven Healx Secures $47 Million for Rare Disease Drug Discovery

Healx, a U.K.-based startup leveraging AI for drug discovery in rare diseases, has successfully raised $47 million in a Series C funding round. The round was co-led by Europe's Atomico and Silicon Valley's R42, marking a significant step forward for the company's ambitious plans. Alongside this financial boost, Healx has also obtained regulatory approval to commence Phase 2 clinical trials for a new drug in the U.S. later this year.

Positioning itself as a “drug discovery pipeline,” Healx aims to uncover hidden connections between existing chemical compounds and rare diseases. The company achieves this by aggregating a vast array of public and proprietary data sources, including biomedical literature, disease and biochemical datasets, clinical trials, and patents. These efforts culminate in the creation of a “biomedical knowledge graph” that maps rare diseases comprehensively.

Tim Guilliams, Healx's co-founder and CEO, explained the company's innovative approach to TechCrunch. "Our AI platform and expert teams enable us to identify and discover novel disease biology and match it with suitable small molecules." He further elaborated that the digital biology team focuses on understanding complex biological disease signatures, while the digital chemistry team uses AI to match these signatures with chemicals, small molecules, and drugs through techniques like virtual screening and generative chemistry.

The traditional pharmaceutical approach, often termed “one disease, one target, one drug,” is typically time-consuming and has high failure rates. Healx offers a solution by analyzing millions of data points related to drugs and diseases simultaneously, revealing previously unnoticed connections that could lead to new treatments using known compounds.

Founded in Cambridge in 2014 by Guilliams and the company’s chairman, David Brown, Healx boasts a strong foundation in drug discovery. Guilliams holds a PhD in biophysics and neuroscience from the University of Cambridge, while Brown, the co-inventor of Viagra, brings extensive experience as the former global head of drug discovery at Roche.

With the newly acquired $47 million, Healx is set to launch a Phase 2 clinical trial for a treatment it developed for Neurofibromatosis Type 1 (NF1), a genetic disorder causing tumor growth on nerves. Though rare, NF1 is relatively common among genetic disorders, affecting approximately 1 in 3,000 individuals. The disorder often leads to benign tumors that, while typically non-cancerous, can cause significant issues affecting the skin, eyes, and nervous system, and may become malignant over time.

In 2021, Healx secured investigational new drug (IND) approval from the FDA for treating Fragile X syndrome and is currently in the early AI-discovery or preclinical stages for various other conditions, including oncology, renal diseases, and neurology.

The upcoming Phase 2 trials for Healx’s NF1 lead candidate, HLX-1502, are anticipated to start by the end of 2024, targeting young adults with NF1 and inoperable plexiform neurofibroma. HLX-1502 was derived from an existing drug developed for an entirely different purpose, which never launched in the U.S. Healx is reformulating this drug, relying on previous safety data to minimize side effects.

"There’s a lot of cancer treatments out there where they kill everything — the healthy cells, the unhealthy cells — and there are a lot of side effects," Guilliams said. He emphasized the importance of developing treatments with fewer side effects, especially for conditions like benign NF1, which can allow patients to live decades without severe complications.

Healx's innovative technology evaluates existing drugs in development and those that have been shelved but still hold potential. "There’s hundreds of thousands of compounds and small molecules," Guilliams noted, highlighting how AI helps in identifying the most de-risked drugs for specific disease biology.

Despite its innovative approach, Healx had to make strategic adjustments during challenging economic times. The company reduced its headcount by approximately 45% last year, cutting around 70 staff. Guilliams attributed this to adapting effectively to new market conditions, streamlining operations, and focusing on core strengths.

The recent $47 million funding round underscores investor confidence in Healx's approach and technology, despite the economic downturn. The company plans to expand its presence in the U.S., with clinical trials expected to start by December. Healx aims to achieve clinical results by the first half of 2026, potentially paving the way for the drug to enter the market.

This Series C round saw participation from Atomico, R42, Ayana Capital, Balderton, Btov, Global Brain, Jonathan Milner, O2h, and VU Venture Partners.