(Bloomberg) — Isomorphic Labs, an AI-powered drug discovery startup spun out of Alphabet Inc.’s Google DeepMind, is in early talks to raise new funds at a valuation of at least $40 billion, according to people familiar with the effort.

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The round could value Isomorphic as highly as $50 billion, one of the people said. The financing hasn’t closed and details could change, the people said. Isomorphic did not respond to a request for comment.

Only five months ago, Isomorphic Labs raised $2.1 billion in its series B funding effort, Bloomberg News reported. At the time, the company’s chief executive officer Demis Hassabis, who is also chairman of DeepMind, said Alphabet provided a “large part” of the financing round but declined to comment on Alphabet’s stake or his company’s valuation.

Hassabis was formerly the head of DeepMind, but in August announced that he was shifting to a chairman role and becoming Alphabet’s chief scientist, while remaining CEO of Isomorphic.

London-based Isomorphic Labs was formed in 2021 out of DeepMind with the goal of commercializing the lab’s breakthrough AlphaFold protein-folding model. It competes with an array of businesses trying to apply the latest AI advances to medicine. That includes OpenAI, which this year released a model for life sciences research.

While AI developers promise to dramatically reduce the time and cost of developing drugs, few have progressed to clinical trials and none have brought medicine to the market.

Isomorphic Labs has announced partnerships with major pharmaceutical firms, including Eli Lilly & Co. and Novartis AG, and shared plans to focus on treating cancer and immune disorders. In addition to working with pharma companies to leverage its AI drug discovery models, Isomorphic is also aiming to design and develop drugs in house.

https://finance.yahoo.com/healthcare/articles/alphabet-isomorphic-labs-funding-talks-040000989.html?shem=aimgspe,