Could Valo Health become one of Flagship Pioneering’s biggest companies yet? – TechCrunch

by Jeremy

The investment firm Flagship Pioneering has incubated many life sciences companies since it was founded in 2000. While a general partner with Flagship Pioneering over the last 15 years, David Berry has started more than 30 companies. There are five of which trade publicly right now: Seres Therapeutics, Sensen Bio, Evelo Biosciences, T2 Biosystems, and Axcella Health.

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Berry is often a company’s first CEO, then transitions out of the company within 18 months. But he has no plans to leave his post as CEO of Valo Health, a three-year-old, Boston-based, 110-person drug discovery company that Berry and Flagship seem to think could become one of the firm’s most essential companies yet. That’s notable, considering that Flagship incubated 11-year-old Moderna, which currently boasts a $50 billion market cap thanks in large part to its coronavirus vaccine.

Given Berry’s and Flagship’s track record, perhaps it’s no surprise that Valo has attracted believers. Notably, today it is announcing a fresh $110 million in extended Series B financing from Koch Disruptive Industries that brings the round total to $300 million. The overall amount the young company has raised to more than $450 million.

Still, given that there are hundreds of drug discovery companies in the world seizing on the latest advancements in AI, machine learning, and computation, it’s easy to wonder what’s so special about this one. We got Berry’s take during a chat with him yesterday, parts of which we are featuring below edited for length and clarity.

TC: Valo is trying to accelerate the creation of drugs, and it has a computational platform called Opal to do it faster and more effectively than many rivals. Is there a way to make it more apparent to outsiders why this platform is so unique? 

DB: First, from day one, we were operating differently [than past Flagship Pioneering companies]. Typically, when you look at Flagship companies, Flagship has an [exclusive] initial commitment of plus or minus $50 million. But because of the scale of the opportunity that we saw ahead of us with Valo, we started by bringing in external financing partners as part of a Series A that was around $100 million.

[Also unique is the] breadth of what we’re trying to achieve through our systematic approach to R&D, instead of a targeted course to thinking about it. There’s been a historical challenge in life sciences in that companies are primarily viewed based on what their lead therapeutic asset looks like. But suppose you can potentially change the scope, the scale, the possibility, the speed, the probability of success, [and] the cost of developing drugs. In that case, you’re not going to look like a typical therapeutics company.

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