In this week’s edition of InnovationRx, we look at a new AI drug development deal, a pill for sleep apnea, Commure’s $7 billion valuation, and more. To get it in your inbox, subscribe here.
Genesis Molecular AI’s Evan Feinberg (left) and Incyte’s Pablo Cagnoni
Genesis Molecular AI and Incyte
Evan Feinberg founded Genesis Molecular AI seven years ago to take his research at Stanford on AI for drug discovery to the real world. Today the company announced its biggest partnership to date: A $120 million deal with publicly traded global biotech Incyte (market cap $19 billion) that includes both $80 million in upfront cash and a $40 million equity investment. The deal could be worth a total of more than $1 billion with future milestone payments, plus potential royalties.
As part of the agreement, Incyte’s proprietary experimental data will be used to train Genesis’s foundation model to increase its capabilities.
“Drug discovery is one of the famously difficult grand challenges for AI,” Feinberg tells Forbes. “There are a lot of easier ways these days to work on AI.”
Feinberg, who is 34 and an alum of the 2019 Forbes 30 Under 30 list, cofounded the San Mateo, California-based company based on his Ph.D. work in the lab of venture capitalist Vijay Pande. Since then, it has raised $340 million from investors that include Andreessen Horowitz, NVidia and Menlo Ventures.
The deal follows a massive $2.1 billion fundraise last week for Isomorphic Labs, the Alphabet-founded drug discovery firm, as hopes have risen that the promise of AI to cut the time and cost to develop new therapies will pay off.
It’s also indicative of how AI drug discovery companies are increasingly raising funds from partnerships with major pharma and biotech companies – often structured as cash, but also, as here, with a mix of cash and equity – rather than relying solely on VC funds. Developing medicines is a long game. Even if AI efficiently finds potential new therapies for previously “undruggable” targets, it still takes years to go through the clinical development process and gain approval from regulators.
Pablo Cagnoni, Incyte’s president and global head of R&D, tells Forbes that the company had been looking for a tech partner to collaborate with starting a year and a half ago, and zeroed in on Genesis after speaking with a handful of companies. The two first signed a deal in February 2025 for which Genesis received $30 million upfront to collaborate on two targets in oncology. The new, bigger deal represents a doubling down on those efforts. “There are a lot of companies that make very strong claims about what their capabilities are, and then you come out of the meeting unconvinced. The opposite was true here,” Cagnoni says.
Incyte and Genesis will work together on five potential targets in Incyte’s portfolio, across oncology, hematology and inflammation, with the potential to expand to 20 targets, Cagnoni says. “In some of these target areas, the Genesis team will give us the final tweak at the end, and in others it will be in the beginning,” he says.
For Genesis, Incyte isn’t its first drug developer agreement, though it is its largest. It previously partnered with Gilead (for which it received $30 million upfront to work on three initial targets) and Eli Lilly.
Apnimed Files For Approval For Sleep Apnea Drug
Dr. Larry Miller, Apnimed’s cofounder and CEO
ALBIE COLANTONIO FOR FORBES
A drug for sleep apnea is moving closer to reality: Apnimed filed for regulatory approval for its medicine, which could put it on track for approval in the first quarter of 2027. The Cambridge, Mass.-based startup simultaneously published results from its phase 3 clinical studies in the American Journal of Respiratory and Critical Care Medicine, showing significant improvements in airway obstruction and oxygenation in people with sleep apnea, regardless of weight or disease severity, as well as improvements in symptoms like fatigue and snoring.
Forbes previously profiled Apnimed, an early-stage biotech that acquired the rights to the potential medication from Harvard. In very simplified terms, it works by waking up the brain stem, preventing full muscle relaxation in the throat, while allowing the brain itself to rest during sleep.
Obstructive sleep apnea affects some 80 million people in the U.S. alone, the majority of whom are undiagnosed and untreated. That’s at least in part because the primary treatment for the disorder–a continuous positive airway pressure machine, or CPAP, that forces air down a wearer’s throat–is hated by most who use it. But the disorder has significant health impact. Research shows that people with untreated sleep apnea are more likely to develop heart trouble, strokes, and perhaps even Parkinson’s and Alzheimer’s.
For some with sleep apnea, increasingly popular GLP-1 weight loss drugs may be an additional solution. Makers of these drugs have been testing them for use for sleep apnea in people who are obese, and Eli Lilly’s Zepbound gained approval for overweight patients with sleep apnea in December 2024.
Read our January profile of Apnimed here.
Isomorphic Labs Has A Massive Cash Horde, But Is Tight-Lipped On The Drugs In Its Pipeline
Isomorphic Labs, the Alphabet-founded firm that uses AI to accelerate drug development, raised $2.1 billion last week. That’s a boatload of cash for a drug developer and an important sign of the market’s high hopes that AI can fix the costly, lengthy drug development process.
The London-based company has built a drug development engine that it calls IsoDDE that goes far beyond what it first created with AlphaFold, for which founder Demis Hassabis won the Nobel Prize in Chemistry in 2024. The big question for Isomorphic now is what drugs it is actually creating with technology and on that Max Jaderberg, the company’s president, is cagey.
Jaderberg tells Forbes that Isomorphic has been expanding its internal pipeline of therapies due to its success with the drug design engine–a big move for a company rooted in Big Tech–in addition to its partnerships with big pharma companies Novartis and Eli Lilly. The internal work is now focused on oncology, immunology and inflammation. “The programs we are going after are not fast-follower programs,” Jaderberg says. “We are thinking about going after these big zero-to-one problems where maybe the rest of the world has struggled to produce good medicines for patients or we can change the standard of care.”
He says that Isomorphic intends to take those drug candidates to clinical trials itself, though he declined to discuss the company’s lead therapies, or what the timeline for getting into the clinic would be. (At an event at this year’s World Economic Forum in January, Hassabis gave a timeline of the end of 2026, a full year delay from what he previously said.)
Whether Isomorphic will ultimately sell off those assets, license them to pharmaceutical companies or choose to become a more traditional drug company by marketing the therapeutics it creates also remains an open question. Jaderberg says that he considers each drug as essentially “an individual business,” so the answer could be different for each one.
Read more here.
Deal of the Week
Commure, which markets AI-powered enterprise software for healthcare operations, raised $70 million in an investment valuing the company at $7 billion. The Mountain View, Calif.-based company is focused on the administrative side of healthcare. It automates revenue cycle management processes to bring down time and cost of administration and uses ambient AI to assist doctors with electronic health forms. General Catalyst, which incubated the company, led the round. Commure plans to use the new funds to expand across specialties and to improve its AI models. The company’s CEO Tanay Tandon told trade publication Fierce Healthcare that it has more than $200 million in contracted annual recurring revenue and has been doubling its ARR each year for the past three years.
WHAT WE’RE READING
The World Health Organization called public health agencies around the world unprepared for the next pandemic, just days after it labeled an outbreak of Ebola in Congo a public health emergency.
A growing number of Republican-led states are helping Trump’s deportation efforts by requiring their Medicaid agencies to notify the Department of Homeland Security if there are questions about an aid recipient’s immigration status.
TrumpRx is adding generic drugs to its lineup through deals with Mark Cuban’s Cost Plus Drugs, GoodRx and Amazon.
The Supreme Court preserved mail-order access to the widely used abortion pill mifespristone, allowing women to continue to get the drug while litigation continues.
Treatment for alcohol addiction is undergoing a seismic shift that many say is long overdue.
Eight out of the top 10 officials of the National Institute of Allergy and Infectious Diseases have been ousted under the Trump Administration as the agency moves away from pandemic preparation.
Two big healthcare investors, GHO and CBC, are merging to create a $21 billion shop, which they say will be world’s largest in the sector