Photo Credit: Miroslaw Miras from Pixabay

Lexington-based Valo Health is one of the pioneering players in the AI-drug discovery market. Set up in 2019 as part of Flagship Pioneering’s initiatives, Valo has had quite a roller coaster ride so far.

Valo Health’s Offerings

Valo was founded by David Berry when he was a general partner at Flagship Pioneering. Initially set up as Integral Health, Valo was founded with a mission to change how drugs were developed. Flagship Pioneering invested $100 million to set up Valo. Soon after, it acquired San Francisco-based AI company Numerate for an undisclosed sum. It followed the acquisition with that of FORMA Therapeutics, an early-stage drug discovery platform in March 2020.

Valo built its portfolio through acquisitions of a skilled team, early discovery labs, and R&D libraries. The acquisitions provided its engineers with the basic platform with over 30,000 models and 70 trillion molecules. Drug discovery is a highly time consuming and a resource consuming activity. Valo’s engineers applied emerging techniques in computing to human data to improve efficiency and accelerate the probability of drug discovery. They created a closed-loop system that integrates computationally driven and empirical approaches to create powerful drug candidates, including molecules aimed at hard-to-drug and undruggable targets.

Valo focuses on treatments for cardiovascular diseases, neurodegeneration, and cancer. Its platform Opal has been designed to identify new drug candidates, evaluate new and known molecules, predict which patients will benefit the most, and design efficient clinical trials. To help with its process, Valo has access to a data lake that includes agreements with national healthcare systems and exclusive data about diseases. The data follows patients across decades as they develop symptoms and respond to various treatments.

Valo has matched up healthcare records with patients’ genomes, proteomes, metabolomes, microbiomes, and even radiographic images and pathology samples to create one of the most integrated clinical data sets in the world. Traditional drug discovery is characterized by siloed data and siloed operations with a 5% success rate. Opal uses its AI-based computational model along with chemistry and tissue production knowledge with a combination of this exclusive and publicly available patient data to fine tune its machine learning models.

Unlike traditional drug discovery where companies deal with siloed data, Opal has built an integrated approach for a digitally-native drug discovery and development process. By 2021, Opal had an internal pipeline with two clinical-stage assets and 15 prioritized pre-clinical assets across cardiovascular metabolic renal, neurodegeneration and oncology fields.

Valo Health’s Financials

By June of 2021, Valo was in talks to merge with Khosla Ventures Acquisition Co which would help it go public. The combined entity was expected to be valued at $2.8 billion. But by the end of the year, the deal was called off and the failure was attributed to “market conditions”. Since the end of those conversations, Valo has remained privately held and has not revealed any details on its financials. It is said to have raised $595 million in venture funding.

Meanwhile, Valo continues to do strong business with other pharma companies on drug discovery. Recently, it announced an expanded $2.7 billion partnership with Danish pharma, Novo Nordisk. It plans to combine Novo Nordisk’s expertise in cardiometabolic diseases with capabilities in human data and genetics to gather insights from human genetic and longitudinal patient data in obesity, type 2 diabetes, and cardiovascular diseases. Under the expanded partnership, Novo Nordisk has agreed to pay Valo $190 million upfront, up-to-$4.6 billion in milestones, plus R&D funding and potential royalty payments.

Like other AI-drug discovery companies, Valo is looking for a successful molecule to prove its case. Recently, though, it had a setback when it announced plans to drop Rho kinase (ROCK) 1 and 2 inhibitor for diabetic retinopathy as it failed to reduce the severity of the disease in a phase 2 trial.

More By This Author:

AI Drug Discovery Startups: Berg Health Focuses AI On Prostrate Cancer And Parkinsons
AI Drug Discovery Startups: Analysis Of Exscientia’s Acquisition By Recursion
AI Drug Discovery Startups: Atomwise Focuses On AI-Based Small Molecule Discovery