Lilly backs precision medicine start-up’s $65 million raise

Eli Lilly and Company is investing in a precision medicine start-up that promises to engineer drugs for more targeted delivery.

Ampersand Biomedicines has raised $65 million in a series B financing round with investment from the pharmaceutical giant and Ampersand’s founding firm, Flagship Pioneering. The start-up will use the funding to wrap up preclinical work on two new immunological drug candidates, one focused on inflammation and the other on cancer. The series B is Ampersand’s first venture capital financing since it launched with $50 million from Flagship 2 years ago.

CEO Jason Gardner declines to share specifics about the exact targets or compositions of those two lead compounds, or when they might advance into human trials. But he does say they’re engineered as improved versions of existing drugs—“parent molecules,” which could be anything from early-stage drug candidates to approved treatments—with tweaks for better potency and tolerability.

“Basically, they came from drugs that we knew were active, but they had some challenges,” Gardner says. “They didn’t work well enough at the right dose, so they had some off-target effects.”

Gardner says Ampersand is agnostic about whether it develops a small molecule or a biologic. For the start-up, the only concrete goal is to get drugs to the right place in the body, which he calls “one of the single biggest challenges in medicine today.” To do that, Ampersand takes available data about existing compounds, including their delivery challenges, and uses it to design molecules in silico. The drug candidates that show promise on the computer are then made and tested in a lab.

“The large amount of data we have that feeds the platform, through training datasets and machine learning, is very powerful,” Gardner says. “We’re looking forward to the next chapter.”

Ampersand acquired a Czech firm called AbCheck for an undisclosed amount last year, inheriting the company’s antibody discovery capabilities, which now help Ampersand find antibodies to target.

Ampersand has also partnered with Pfizer since November to develop a targeted weight-loss drug. Pioneering Medicines, Flagship Pioneering’s pharmaceutical partnering vertical, recently tapped the start-up for another weight-loss drug discovery collaboration. Gardner will not say whether Lilly’s investment in the series B indicates the potential for a partnership between Ampersand and the Big Pharma firm, which has made billions from the weight-loss and diabetes drugs Mounjaro and Zepbound.