Healx Secures $47M in Series C Funding for AI-Driven Drug Discovery
Major Investment for Rare Disease Drug Discovery
Healx, a UK-based startup leveraging artificial intelligence to discover new treatments for rare diseases, has successfully raised $47 million in a Series C funding round. This round was co-led by Atomico, a European venture capital firm, and R42, based in Silicon Valley.
Progressing to Clinical Trials
In addition to the funding news, Healx announced that it has obtained regulatory clearance to commence Phase 2 clinical trials for a new drug in the United States later this year. This marks a significant milestone for the company as it moves forward with its innovative approach to drug discovery.
AI-Enhanced Drug Discovery
Healx describes itself as a “drug discovery pipeline” that uses AI to find hidden connections between existing chemical compounds and rare diseases. By integrating data from various public and proprietary sources—including biomedical literature, clinical trials, and patents—Healx creates a “biomedical knowledge graph” focused on rare diseases.
“Our AI platform and expert teams enable us to identify and discover novel disease biology and match it with suitable small molecules,” Healx co-founder and CEO Tim Guilliams told TechCrunch. “Our digital biology team focuses on understanding complex biological disease signatures, while our digital chemistry team uses AI to match these signatures with chemicals, small molecules, and drugs, using computational techniques such as virtual screens and generative chemistry to do so.”
Innovative Approach to Drug Development
Traditional pharmaceutical companies often follow a “one disease, one target, one drug” methodology, which can be time-consuming and prone to high failure rates. Healx aims to revolutionize this process by analyzing millions of drug and disease data points simultaneously, uncovering potential new treatments using known compounds.
Founded in Cambridge in 2014 by Guilliams and David Brown, Healx benefits from the extensive expertise of its founders. Guilliams holds a PhD in biophysics and neuroscience from the University of Cambridge, while Brown, former global head of drug discovery at Roche, is renowned as the co-inventor of Viagra.
Focus on Neurofibromatosis Type 1
With the new $47 million investment, Healx is preparing to launch a Phase 2 clinical trial for a treatment targeting Neurofibromatosis Type 1 (NF1), a genetic disorder causing tumor growth on nerves. NF1 affects up to 1 in 3,000 individuals, making it one of the more common genetic disorders. The Phase 2 trials, set to begin by the end of 2024, will focus on young adults with inoperable plexiform neurofibroma, a specific type of NF1-associated tumor.
Healx developed its NF1 lead candidate, HLX-1502, by repurposing an existing drug. “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 explained. “So for the patient community and the families, for those who have the benign form, it can live 40 to 50 years. It doesn’t make sense to put them on chronic cancer drugs for decades with side effects that are very strong.”
Intellectual Property and Market Potential
Guilliams confirmed that Healx owns the patents for HLX-1502 for treating NF1 and other nerve-related diseases, with the FDA granting it new drug product exclusivity in the U.S. market. Despite the origins of the original compound remaining undisclosed, the company’s comprehensive commercial and IP analysis ensures that it selects de-risked candidates for clinical development.
Financial and Strategic Adjustments
Prior to this round, Healx had raised approximately $68 million, including a $56 million Series B round in 2019. The company also secured an investment from the Children’s Tumor Foundation, which will provide milestone-driven payments as Healx progresses through its clinical trials.
Notably, the Series C round is $9 million less than the Series B round, reflecting the challenging funding environment for startups. Healx adapted by streamlining operations and reducing headcount by about 45% last year, according to Guilliams.
Future Prospects and Market Expansion
Currently employing around 55 staff, Healx plans to expand its presence in the U.S. as it begins clinical trials. The company expects to see clinical results by the first half of 2026, with potential market entry dependent on these results and regulatory interactions.
Guilliams remains optimistic about the future, highlighting the $16 billion market size for NF1 and the potential for HLX-1502 to treat other nerve-related diseases. “The market size for NF1 is $16 billion [according to Healx’s own internal commercial analysis], and if [its candidate] works on NF1, it’s likely to work on other nerve-related diseases—we’re testing those pre-clinically already,” he noted. “In rare diseases, the clinical trials are smaller, so we don’t need a ton of money, which, in the current markets, is a good place to be.”
Competitive Landscape
Healx’s recent funding round is part of a broader trend of investments in AI-driven drug discovery platforms. Other notable examples include Sam Altman-backed Formation Bio, which raised $372 million, and Xaira, which launched with $1 billion in funding.
Despite the competition, Guilliams is confident in Healx’s progress and potential. “Given the challenging market conditions for deep tech and biotech funding over the past two years, our ability to secure this investment underscores the confidence our investors have in our approach and technology,” he said.
As Healx continues to advance its AI-powered drug discovery efforts, the company remains focused on delivering innovative treatments for rare diseases, with the ultimate goal of improving patient outcomes and quality of life.
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