According to a recent study published in JAMA, the average development cost for a drug that’s approved by the FDA is $1.3B based on 62 recently approved candidates. Other estimates show that it can be as high as $2.8B. A large portion of the cost is derived from time spent in development. AI is now being used to address increasing costs by making the development of new pharmaceuticals quicker, cheaper, and more effective. Terray Therapeutics is an AI-powered drug discovery and development platform that focuses on applying machine learning to understand and precisely measure molecular design. Drug discovery relies on understanding the biochemical interactions between small molecules and causes of disease and Terray’s biocomputational engine is able to sort through and compare the properties of millions of small molecules in a fraction of the time it would take through traditional discovery processes. By reducing the time to identify the most effective properties, drug developers can then get to candidates to optimize quicker and also accelerate time to trial.
LA TechWatch caught up with Terray Therapeutics CEO Jacob Berlin to learn more about the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $80M, and much, much more…
Who were your investors and how much did you raise?
We have been extremely lucky to attract amazing investors who are passionate about transforming human health by interfacing modern computation with unprecedented data generation. We raised $60 million in our Series A, which was led by Madrona Venture Group with participation from a broad syndicate of new and existing investors, including Two Sigma Ventures, Digitalis Ventures, KdT Ventures, Goldcrest Capital, XTX Ventures, Sahsen Ventures, Greentrail Capital and Alexandria Venture Investments. This financing follows a previously unannounced $20 million seed round co-led by Digitalis Ventures and Two Sigma Ventures.
Tell us about your product or service.
Powered by the right data, AI has transformed our everyday lives – solving challenges from how to get to dinner to what show to watch to how to invest our money.
Drug discovery urgently needs such transformation. Chemistry is the key to drug development, but current chemical data lacks the scale and quality to enable AI-driven drug development. Many platforms today are built on data that is subscale, poor quality, or both – and drug development cycles are lengthy, with high failure rates.
Even the most powerful artificial intelligence can’t get past insufficient or murky data.
Our technology harnesses the world’s most dense microarray technology to generate precise chemical data purpose-built for AI-driven drug discovery.
We run iterative cycles of virtual molecular design and precise biochemical measurement, feeding forward every experiment to power artificial intelligence and machine learning models, which in turn guide the next cycle of design.
Our system runs with unmatched speed and scale, becoming more precise with each cycle. This is how we accurately navigate the vast chemical space to deliver therapeutics for previously inaccessible targets.
We’re bringing drug discovery into the information age and building a future where the speed, precision and scale of our engine enable us to predictably create drugs that meet urgent patient needs.
What inspired the start of Terray Therapeutics?
Terray was founded in October 2018, and we have made enormous progress since we started the business. The Company is based on technology that was developed over six years ago at City of Hope, I was a professor that ran a lab at the intersection of nanomaterials and synthetic chemistry for applications in drug discovery and drug delivery. The drug discovery research became Terray and the underpinning intellectual property is exclusively licensed to the Company and robustly patented domestically and abroad. Since our launch we have built a world class management team with decades of drug discovery and development expertise, grown the computational and experimental team to 50 scientists, productionized our discovery engine, advanced our internal pipeline of therapeutics and leveraged our proprietary technology to address partners’ drug discovery challenges.
How is it different?
The difference is the data. We don’t believe that the challenge in drug discovery is an algorithm challenge. It is a data challenge. With orders of magnitude better resolution than any other data out there, we can answer a vast, unprecedented array of questions, meeting them with the power of modern computation to derive insights that rapidly lead to new drugs for patients in need.
What market are you targeting and how big is it?
We are developing small molecule therapeutics, which is close to a trillion-dollar market.
What’s your business model?
Terray is a drug discovery and development company. We partner with large pharma and mid-tier biotech organizations to collaborate on discovery and development challenges beyond the scope of our internal pipeline. Given the speed and breadth of our platform technology, we can support a significant number of meaningful integrated partnerships at any given time.
What are your post-COVID office plans?
You can’t do lab work over Zoom! Our amazing team has been working tirelessly throughout the pandemic in our labs in Pasadena. We have followed strict PPE procedures and focused on protecting the team at every step by providing appropriate testing capabilities and ensuring workplace safety.
What was the funding process like?
We were extremely encouraged by the response from the Venture community. Terray initially raised $20M in Seed Funding from a group of world class investors, all of whom participated in our $60M Series A Financing as a testament to their belief in the progress we have made and the opportunity that we have in front of us. The ecosystem of investors interested in the intersection of computation and scale experimentation is tremendous and growing constantly.
What factors about your business led your investors to write the check?
Again, it’s the data. Nobody else can generate the scale of precise chemical data that we can. Every industry that has been transformed by AI has leveraged enormous, evolving data sets – such as stock prices, images or tracking millions of people on the internet. We uniquely generate that type of data for drug discovery and development.
Again, it’s the data. Nobody else can generate the scale of precise chemical data that we can. Every industry that has been transformed by AI has leveraged enormous, evolving data sets – such as stock prices, images or tracking millions of people on the internet. We uniquely generate that type of data for drug discovery and development.
What are the milestones you plan to achieve in the next six months?
The capital will allow us to progress our internal pipeline towards IND enabling studies, scale and massively parallelize our discovery engine, and expand our integrated partnership work.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Keep at it! Building a company is hard. Focus on key de-risking milestones and trust that the capital will be there when you accomplish your strategic priorities.
Where do you see the company going now over the near term?
For now, we have the funding needed to attract new talent, progress our internal pipeline towards IND enabling studies, scale and massively parallelize our discovery engine, and expand our integrated partnership work.
What’s your favorite outdoor activity in LA?
I love the ocean and am always happy surfing (poorly), snorkeling or just hanging out at the beach. It’s also hard to ignore the amazing hiking in the area and we have quite a few mountain enthusiasts in the company.
