AI-First Business Models Seek to Reshape Drug Discovery

The pharmaceutical industry has long struggled with sky-high costs, lengthy development timelines, and an overwhelming failure rate in drug discovery. Now, a wave of AI-driven startups is aiming to change that. By adopting an AI-first business model, these companies are using computational power to accelerate the identification of life-saving therapeutics.

One company leading this transformation is AION Labs, an Israel-based venture studio that fundamentally rethinks how biotech startups are built. Unlike traditional incubators, which support pre-existing startups, AION Labs creates companies from scratch, beginning with an R&D challenge defined by leading pharmaceutical partners such as AstraZeneca, Merck, Pfizer, and Teva. This reverse-engineered approach ensures that the startups formed within AION Labs are addressing critical, real-world needs from day one.

In partnership with BioMed X, the venture studio has just launched its first 2025 Global Call for Applications, seeking scientific founders to build a new startup centered on generative AI for novel target combinations. The initiative aims to revolutionize multi-target drug discovery, a critical frontier in treating complex diseases such as cancer, cardiovascular disorders, and immune-mediated conditions.

“Over the past three years, AION Labs has built a unique venture studio model that brings together global pharmaceutical leaders, AI innovators, and investors to tackle some of the toughest challenges in drug discovery,” said AION Labs CEO Mati Gill. “We’ve refined a framework that de-risks early-stage biotech innovation by providing startups with direct access to pharma expertise, data, and funding. Now, 2025 is the year of delivery—where the companies we’ve nurtured move from proof of concept to real-world impact, advancing AI-driven solutions that have the potential to transform drug development and improve patient outcomes.”

AION Labs’ approach is radically different from traditional biotech incubators. Rather than waiting for entrepreneurs to bring ideas forward, AION Labs identifies the most pressing R&D challenges first—challenges that have been pinpointed by global pharmaceutical leaders. The studio then recruits top scientific talent to launch new companies specifically designed to solve these problems using AI-driven solutions.

This problem-first venture creation model ensures that startups emerging from AION Labs are not just pursuing innovation for its own sake but are directly aligned with the biggest unmet needs in drug development. The model also gives these startups a built-in advantage—access to pharmaceutical expertise, funding, and cutting-edge data resources from day one.

Startups backed by AION Labs, such as ProPhet, are pushing the boundaries of AI-driven drug discovery. By employing machine learning techniques—including diffusion models and large language models—ProPhet aims to refine the process of identifying small molecules that can target multiple protein conformations. These AI-powered models hold the promise of reducing drug development costs, shortening timelines, and improving success rates.

Among AION Labs’ most promising ventures is Promise Bio, a biotech startup focused on precision medicine for immune-mediated diseases. Emerging from stealth mode in late 2024 with $8.3 million in seed funding—including backing from AstraZeneca and Pfizer—Promise Bio is using AI to analyze epiproteomics, the study of post-translational protein modifications (PTMs).

These protein modifications play a crucial role in disease progression but remain largely overlooked in drug development. Promise Bio has built a cloud-based AI platform capable of scanning mass spectrometry data to detect PTMs that correlate with treatment responses.

“We started Promise Bio to transform how complex chronic diseases are deciphered and managed,” explained Promise Bio CEO and Co-founder Ronel Veksler. “The key is analyzing the right biological data using the right analytical tools, and by harnessing the advancements in cloud computing and AI, we can now offer broad epiproteomic analysis to enable precision-based decisions for drug R&D and clinical decision making.”

The potential impact is substantial: up to 70% of patients with autoimmune diseases fail to respond to existing treatments. By analyzing protein modifications, Promise Bio aims to predict which patients will respond to specific therapies, reducing reliance on the costly and time-consuming trial-and-error approach currently dominating autoimmune treatment. The company’s technology could also be used for biomarker discovery, clinical trial patient selection, and optimizing drug development pipelines.

Unlike conventional biotech startups, which often struggle to secure funding and establish market fit, AION Labs startups benefit from pre-established industry alignment. By working directly with pharmaceutical leaders from inception, these companies ensure their technologies are not only groundbreaking but also commercially viable and scientifically validated.

With initiatives like its new AI-driven multi-target drug discovery venture, AION Labs is pushing the boundaries of computationally driven biotech innovation. If successful, its AI-first approach could redefine how the pharmaceutical industry develops life-saving treatments—making the process faster, cheaper, and more precise than ever before.

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