Flagship closes $3.6bn biotech fund, with a focus on AI

Noubar Afeyan, founder and chief executive of Flagship Pioneering

Noubar Afeyan, founder and chief executive of Flagship Pioneering

Venture capital group Flagship Pioneering has raised $2.6 billion to support the development of around 25 startups operating in human health, sustainability, and artificial intelligence, with another $1 billion earmarked for “strategic partnerships”.

The commitments underpinning Flagship Pioneering’s eighth fund takes the total raised by the company to $6.4 billion since 2021, although, the top-line value falls a little below what the VC was hoping for when it filed the notice of its intention to launch Fund VIII last November with the Securities & Exchange Commission.

The side fund for “sector-specific” partnerships is an interesting element, coming after a wide-ranging, $7 billion alliance with Pfizer, signed last year, that is focusing on the development of up to 10 candidates from Flagship’s portfolio of companies and which generated its first programme in obesity last month.

Other similar partnerships have been signed with Samsung and Thermo Fisher Scientific on enabling technologies for drug development and life sciences, as well as with Novo Nordisk to seek new medicines for cardiometabolic and rare diseases. The latter resulted in a pair of deals with portfolio companies Omega Therapeutics and Cellarity earlier this year.

Flagship – which was behind the founding of mRNA specialist Moderna and is run by the biotech’s co-founder, Noubar Afeyan – has been making waves in the biotech sector in the last few years with its strategy of creating companies based on biopharma technology platforms, often putting its faith in high-risk ventures.

The strategic deals give the pharma groups the ability to assess technologies emerging from Flagship’s biotechs early on, while the biotechs get opportunities to partner with the multinationals and accelerate their programmes.

AI – including generative AI – lies at the heart of the new fund, according to Afeyan.

“Over the past six years, Flagship has […] pioneered AI-enabled platforms that transform drug discovery, speed up the drug development process, and gain new insights into human health and sustainability,” he said.

“By leveraging the power and potential of generative AI, we’re embracing a future in which companies are created and expanded in ways we have not previously experienced, with the prospect for unprecedented impact.”

The new fund means Flagship is now operating with an aggregate capital pool of $10.9 billion, with $14 billion of assets under management.

“Flagship Fund VIII is backed by a diverse group of investors globally – both new and longstanding limited partners – and we are grateful for their support of the work we do to create breakthrough innovations that address some of the world’s most critical challenges,” said Afeyan.

“This expanded capital pool will enable us to drive scientific discovery, with a portfolio that reflects a compelling combination of platforms, products, and impact.”