Dive Brief:

• Generate Biomedicines, a well-funded startup banking on the promise of artificial intelligence in drug development, filed papers for an initial public offering on Wednesday. 
• Founded by the prolific company creator Flagship Pioneering in 2018, Generate has been steadily raising money and inking partnerships while harnessing AI to generate experimental therapies. The company says it has raised $805 million from sales of preferred stock and brought in $110 million in payments from collaborations with Novartis and Amgen. 
• Now, it’s looking to take the next step in an environment that appears friendlier to biotech IPOs after a years-long downturn. Nine other companies have either priced or announced plans for IPOs since Jan. 1, according to BioPharma Dive data. And the three that have gone public — Eikon Therapeutics, Veradermics and Aktis Oncology — all raised more than $250 million. 

Dive Insight:

Generate is indicative of a more mature startup that may have a better chance of succeeding in today’s markets.

Industry IPOs peaked in 2021, resulting in a flood of companies whose early science didn’t meet investor expectations. With limited funding available to keep going, many collapsed or were acquired and sold for parts.

Investors say they are now looking for companies with products that are more advanced with solid data behind them. Eikon, which went public this week, has a drug in a Phase 2/3 trial for melanoma. Generate’s lead therapy has entered Phase 3 testing for severe asthma, with researchers dosing the first patient on Jan. 26.

Generate says it has already brought three computationally engineered proteins into clinical testing and plans to kick off two more Phase 1 trials this year. Still, the company — like others focused on AI — faces doubts about whether it can deliver on its promise. It’s also faced some setbacks, laying off workers and placing a bet on a COVID-19 treatment too late to meet the demands of the pandemic.

The COVID-19 treatment, dubbed GB-0669, was Generate’s first drug to enter human testing. It showed success in early research, but Generate shelved it last year, “given the current commercial landscape.”

Still, Generate touts that work as proof of its operating thesis. “Advancing GB-0669 from computer to clinic in just 17 months, we’ve demonstrated our platform’s capability to move beyond the limitations of traditional biologics drug discovery, successfully reaching previously undruggable targets with speed and precision,” Generate says on its website.

Generate is led by CEO Michael Nally, who is also a CEO-partner at Flagship Pioneering. The company’s board includes Nobel laureate Frances Arnold and Moderna CEO Stéphane Bancel.