In this week’s edition of InnovationRx, we look at SpaceX’s hopes for healthcare, the AI drug discovery startup Lilly and Pfizer are betting on, the greatest living immigrants in healthcare and more. To get it in your inbox, subscribe here.
The drumbeat to Elon Musk’s SpaceX mega-IPO this Friday is impossible to ignore. But beyond the company’s potential $1.8 trillion valuation for its hodge-podge of businesses from rockets to X (formerly Twitter) to artificial intelligence company xAI, its registration statement filed with the SEC gives a glimpse of its current operations and potential in healthcare.
SpaceX’s biggest healthcare operation to date comes from satellite internet service Starlink, which has more than 10 million subscribers, targeting people in rural or underserved communities. These are areas where healthcare access is an enormous issue, and Starlink is enabling better remote healthcare in them. In Ecuador, for example, SpaceX is working directly with the government to provide remote connectivity for healthcare.
To be sure, SpaceX, which reported $18.7 billion in revenue last year and a net loss of $4.9 billion, doesn’t break out financial details on its healthcare business so it’s impossible to see how big a bet this is.
But there are more opportunities for SpaceX to push into healthcare in the future. In its SEC filing, the company told investors that it wants to manufacture pharmaceuticals in orbit. The microgravity environment of space “enhances drug solubility, purity, crystallization, and stability,” it wrote in the filing. While SpaceX isn’t doing this commercially yet, it’s not as far-fetched as it might sound. Merck, Novartis and Lilly have conducted drug production experiments on the International Space Station, and El Segundo, Calif.-based Varda Space has run multiple test flights to further development of its orbital drug manufacturing technology.
SpaceX also said, not surprisingly, that it sees big opportunities for AI in healthcare and life sciences. In its prospectus, the company highlighted the possibilities of AI to both “expedite scientific discovery” and “aid healthcare professionals in precise medical analysis and diagnosis.” Last year, xAI released a special version of the company’s AI chatbot, Grok, with AI tools geared towards government healthcare and scientific applications.
It’s not clear what the uptake by clinicians or researchers has been. Grok has also run into trouble getting health advice right. When the Department of Health and Human Services used Grok earlier this year to provide nutritional advice to Americans on a website, realfood.gov, it hallucinated medical studies, offered advice contrary to the agency’s nutritional guidance and spewed out other inappropriate content.
Why Pfizer and Lilly Are Betting On This $1.3 Billion AI Drug Discovery Startup
Last June, when AI drug discovery startup Chai Discovery was just 15 months old, it released a new model that could design antibodies. Nearly 20 pharma companies reached out to talk. “It was like we dropped a bomb on the field,” Chai cofounder and president Jack Dent tells Forbes. “People were messaging on LinkedIn at 2 a.m., saying, ‘I am so excited I can’t sleep.’”
Drug discovery is one of the great promises of AI—scientists and investors alike hope that models could upend the laborious process of creating new therapies. Today, a single medication typically costs well over $1 billion and takes more than 10 years. The dream is for the technology to allow drug hunters to find potential therapies faster and with more precision, as well as to come up with treatments for diseases that had previously been considered “undruggable.”
Despite being up against competitors that are older and have more resources, Chai Discovery has catapulted itself to the front of the AI drug discovery race. In January, the startup—newly valued at $1.3 billion—announced a deal with Eli Lilly, the $1 trillion (market cap) drug behemoth best known for its weight-loss drugs, to design multiple novel therapeutics with its AI model. Now, Chai tells Forbes exclusively that it has signed another big AI drug development partnership, this time with $63 billion (2025 revenue) Pfizer.
Earlier this year, the San Francisco-based company, which was featured on this year’s AI 50 list, also quietly deployed the next iteration of its antibody design model, called Chai-3, which it claims is vastly superior to the Chai-2 one that put it on the map. The company is in talks with more than 15 additional pharma companies, and hopes to sign more deals this year. It’s also in talks to raise an additional $400 million at a valuation of $3.4 billion, two investors familiar with the deal told Forbes. It’s still early, and the company has not yet chosen a lead investor, one of those VCs said. Chai declined to comment.
“I think it’s become very clear that they are winning the war,” says Annie Lamont, Oak HC/FT managing partner and honoree on the Forbes Midas List. “They are winning the commercialization war, and they are winning the model and product war.”
Read more here.
Healthcare Pioneers On The Immigrant 250 List
As part of our ongoing celebration of America’s semiquincentennial, Forbes unveiled the Immigrant 250 list, which celebrates the most successful Americans who chose to move here and become citizens. Dozens of healthcare entrepreneurs and medical researchers made the list, including:
Patrick Soon-Shiong: The billionaire medical doctor who invented the cancer drug Abraxane was born to Chinese parents in South Africa and came to the U.S. in 1980. (Read our 2014 profile)
Iman Abuzeid: Born in Saudi Arabia to Sudanese parents, she moved to the U.K. for medical school, then came to the U.S. where she founded Incredible Health, which helps place nurses into job openings at healthcare providers. (Read our 2021 profile.)
Feng Zhang: A pioneer of gene-editing technology Crispr, his company Beam Therapeutics currently has drugs in clinical trials to cure genetic diseases like sickle cell anemia. (Read our 2020 profile.)
David Ho: After Ho came to the U.S. at age 12, he went to CalTech and then Harvard Medical School. His research in anti-viral therapy has transformed HIV into a manageable chronic infection.
Elizabeth Blackburn: Blackburn won the Nobel Prize for Medicine in 2003 for her co-discovery of the molecular mechanisms of aging.
You can read the whole list here.
Deal of the Week
GSK agreed to buy Nuvalent for $10.6 billion, gaining the U.K. pharma giant access to two experimental lung cancer drugs that are due for a decision on approval from the FDA later this year. The all-cash deal represents a 40% premium to Nuvalent’s closing price of $88 on Monday before the deal was announced. Harvard professor Matthew Shair founded the Cambridge, Mass.-based company in collaboration with investors at Deerfield Management in 2017. GSK has said that the two drugs have blockbuster potential, meaning they could top $1 billion in sales apiece. For GSK, that would be an important offset to the coming revenue loss from its best-selling HIV medication, dolutegravir, which faces a patent expiration in 2028. The deal is the second-largest biotech acquisition of the year, behind Sun Pharma’s $11.8 billion purchase of Organon.
WHAT WE’RE READING
Health Secretary Robert F. Kennedy Jr. wants to see Americans’ medical records in his quest to find a link between autism and vaccines, using a little-known state system that allows federal access to detailed, identifiable patient information.
RFK Jr. appears disengaged on many health department matters beyond vaccines.
Johnson & Johnson agreed to acquire Firefly Bio for $1 billion as it enters the race to develop KRAS inhibitors for cancer treatment.
Drug developer Parabilis Medicines targeted a valuation as high as $2.3 billion in an upsized IPO slated for this week. It plans to use the funds on late-stage clinical trials of its drug for desmoid tumors, a form of rare noncancerous growth that forms in the connective tissue.
A new botanical drug derived from marijuana has been approved in Germany to treat chronic pain, ushering in a new future for the medical applications of cannabis.
