Healthcare AI Guy Weekly | 7/2

Our Picks ✨

Highlights if you’ve only got 2 minutes…

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Pioneers in AI-powered drug development

A number of startups are attempting to pioneer AI-powered tech for drug development, including EvolutionaryScale, which emerged from stealth this week with $142M in seed funding from Amazon, Nvidia and others. EvolutionaryScale also just introduced ESM3, a new AI model capable of designing and simulating new proteins in ways that mimic millions of years of natural evolution. Formation Bio, the Sam Altman-backed AI drug development startup, also raised $372M this week boosting its valuation above $1B.

Drug development is a notoriously expensive and challenging endeavor. It takes 10 to 15 years on average to take a drug from initial discovery through regulatory approval, with the cost per drug reaching up to $5.5B. And an estimated 90% of drugs fail to reach the market. This is why everyone is excited and hopeful that AI can help run clinical trials more efficiently and provide drug development teams recommendations for R&D decisions and better predict drug toxicity, tolerability, and efficacy.

Market research firm Markets and Markets anticipates that the market for AI in drug discovery will be worth $4.9B by 2028. Major players in the space include Xaira (which launched with $1B), DeepMind spin-off Isomorphic, Insilico, Jeff Dean-backed Profluent, Enveda and Causaly. It will be exciting to watch the development and progress in this space!

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Most promising startups of 2024, according to VCs

After talking to over a dozen VCs, Techcrunch pulled together a list of some of the most promising digital health startups that have grabbed investors’ attention this year. AI-driven startups that are solving administrative challenges in healthcare dominated the list, with 6 of the 10 total names being AI-focused. Those below:

• Abridge: Founded in 2018, uses AI to automate medical records based on conversations between doctors and patients. Raised $150M Series C at $850M valuation.

• CodaMetrix: Founded in 2019, uses AI to automate medical coding. Raised $40M Series B at ~$220M valuation.

• Cohere Health: Founded in 2019, uses AI to automate prior authorization. Raised $50M Series B earlier this year.

• Memora Health: Founded in 2018, offers virtual AI-based care coordination. Raised ~$80M to date.

• Smarter Dx: Founded in 2020, uses AI to help hospitals capture missed revenues by analyzing patients’ lab results, medications and doctors’ notes to find errors in diagnoses and medical codes. Raised $71M to date.

• Transcarent: Founded in 2020 by Glen Tullman (Livongo founder), offers an AI platform that gives employees access to discounted medications, telehealth services and personalized AI-generated answers about coverage. Raised $450M Series D at a $2.2B valuation.

Despite deal activity in healthcare IT being relatively flat in Q1 2024, with 74 total deals valued at ~$1B total (+3% YoY), these startups have had no problem raising money. They are seen as leaders in their niches and are gaining traction — we’ll be watching eagerly! (more)

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CHAI releases framework for responsible healthcare AI

The Coalition for Health AI released a draft framework for testing the quality of AI in healthcare, seeking to create industry-wide agreement on good, responsible healthcare AI. Founded in 2021, the group now has over 1,300 members — including Google, Microsoft and Amazon — alongside board members from the Mayo Clinic and FDA.

Dr. Anderson, CHAI's CEO, stated that “This step will demonstrate that a consensus-based approach across the health ecosystem can both support innovation in healthcare and build trust that AI can serve all of us.”

CHAI’s framework includes an Assurance Standards Guide and checklists to assist developers and health orgs. It covers six specific AI applications in healthcare and was developed with input from over 100 individuals. Public feedback is crucial and there’s a 60-day period for comments to refine this framework — have your say and submit comments on CHAI’s website: (more)

Tools & Partnerships 🔧

Latest on business, consumer, and clinical healthcare AI tools and partnerships…

TOOLS

• The world’s first AI doctor: Eureka Health introduced Eureka, an ‘AI doctor’ offering personalized care plans, lab orders, and medication adjustments under physician supervision with a specialty in thyroid and diabetes treatments. (more)

• New AI simulates 500M years of evolution: Biotech startup EvolutionaryScale just introduced ESM3, a new AI model capable of designing and simulating new proteins in ways that mimic millions of years of natural evolution. In tests, ESM3 generated a new fluorescent protein 58% different from other known structures — a leap that typically takes nature 500M years of evolution. (more)

• Oracle Health launches AI tool for clinical documentation: Oracle Health introduced an AI-driven clinical documentation tool for ambulatory clinics, designed to transcribe patient-clinician interactions and generate draft notes within the EHR. Oracle plans to expand the tool’s availability to other EHR systems and specialties in the future, leveraging Android and Apple devices for recording and cloud-based AI for transcription. (more)

• Atropos Health expends evidence network to 300M patients: Atropos Health’s Evidence Network has expanded to include data from Forian and Syndesis, reaching 300 million patients and becoming the largest federated healthcare data network. The network allows clinicians and researchers to query extensive datasets from partners like Stanford and Mayo Clinic without compromising patient data security, facilitating HIPAA compliance and enabling transactional data use. (more)

• Tempus wins FDA nod for AI-backed heart diagnostic: Recently-IPO'ed health tech firm Tempus AI (NASDAQ: TEM) announced that the U.S. FDA cleared its Tempus ECG-AF device designed to leverage AI to help detect patients at risk of developing a heart condition known as atrial fibrillation/flutter. (more)

PARTNERSHIPS

• Eli Lilly + OpenAI: Eli Lilly announced it is partnering with OpenAI to leverage its generative AI to develop antimicrobials that can be used to treat drug-resistant bacteria. (more)

• Wellsheet + Concord Hospital: The AI-enabled Smart EHR UI solution announced a client-reported 16.3% reduction in length of stay and 40% decrease in time spent in the EHR via its partnership with Concord Health, as well as the release of its new LLM-generated handoff summary feature. (more)

Deal Desk 💸 

Spotlight on latest capital raises, M&A, and investments…

FUNDING

• Formation Bio, an AI drug development startup raised $372M in Series D funding led by Andreessen Horowitz with participation from drug maker Sanofi, Sequoia, Thrive, Emerson Collective, Lachy Groom, SV Angel Growth and FPV Ventures. (more)

• EvolutionaryScale, a company using AI models that can generate novel proteins for scientific research, raised $142M in a seed round led by ex-GitHub CEO Nat Friedman, Daniel Gross and Lux Capital, with participation from Amazon and NVentures, Nvidia’s corporate venture arm. (more)

• N-Power Medicine, a CA-based clinical research and drug development platform, raised $72M in Series B funding. ​​Merck Global Health Innovation Fund led the round and was joined by others. (more)

• Function Health, an Austin, TX-based AI-powered lab testing platform, raised $53M in funding. a16z Bio + Health led the round and was joined by a16z Cultural Leadership Fund, Wisdom.vc, Draft Ventures, K5 Ventures, G9 Partners, 53 Stations, and others. (more)

• Adonis, an AI-driven revenue cycle management platform, raised $31M in Series B financing led by Point72 Private Investments. Point72 Private Investments was joined by new investor Kin Ventures, along with existing investors General Catalyst, Bling Capital, and Max Ventures. (more)

• Sensi.AI, a CA-based AI copilot for caregivers, raised $31M in Series B funding. Zeev Ventures and Insight Partners led the round and was joined by existing investors Entrée Capital, Flint Capital, Jibe Ventures, and Secret Chord Ventures. (more)

• Synthpop, a Wellesley, MA-based AI platform designed to automate healthcare workflows, raised $5.6M in seed funding. Peterson Ventures led the round and was joined by defy.vc, Zelda Ventures, Think+ Ventures, and OVO Fund. (more)

• MEandMine, a company using AI to flag mental health risks in children, added $4.5M in a funding round led by K5 Global. (more)

GRANTS

• Mayo Clinic, Mayo Clinic received a $20M gift from Dwight and Dian Diercks to explore AI for cancer detection and intervention. (more)

• AWS, Amazon Web Services committed $10M to fund pediatric rare disease research, including cancer. The tranche of cash is first being allocated through three, $1M grants to Children’s National Hospital in Washington, D.C.; Nationwide Children’s Hospital in Columbus, Ohio; and the Children’s Brain Tumor Network, located at the Children’s Hospital Of Philadelphia. (more)

💰If you want to track the latest funding rounds across all AI startups for free,

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Other Relevant News 🔍

News, podcasts, blogs, tweets, resources, etc…

• Texas hospital group offering patients option to see doctor as a hologram (more)

• Panelists discuss AI’s use in aging services (more)

• Opinion: AI can help with collecting patient-reported outcomes (more)

• AI impact on cancer care and research highlighted (more)

• How AI revolutionized protein science but didn't end it (more)

• Opinion: Sanford Health CEO touts AI promise in rural healthcare (more)

• States increasing regulation of insurers’ use of AI to make decisions (more)

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Visuals of the Week 📸

Funny memes, cool pics, and interesting data from around the web…