Investing at the Frontier of AI and Biology with Amino Collective's Nirmesh Patel

Nirmesh Patel is an investor at Amino Collective, an early-stage health and bio fund investing at the intersection of AI and the life sciences.

What led you to the world of biotech investing?

I'm a scientist by training, which drives a lot of how I think. I was doing a Ph.D. in cancer research looking for new drug targets in triple negative breast cancer, which at the time had one targeted therapy against it. It's super aggressive and affects younger women. I found 33 new drug targets through that process and partnered some of those with major pharma companies, did diagnostic assays, and drug combination screens. My supervisor used to joke that I was a one-man biotech company during the Ph.D.

But I got frustrated at some point. We were dealing with an easy problem for cancer patients, which was finding new drugs and drug targets. We weren't really facing the hard problem, which was matching patients to the right therapy, especially as tumors constantly evolve and gain resistance. So I started a company in Cambridge with two co-founders to solve that. We were doing treatment monitoring for cancer patients and grew that over five years. Going through Y Combinator as part of the journey really helped us take off. We ended up selling that company in 2021.

After that I ran deep tech investing at a New York-based fund for three years, leading a lot of the early tech-bio investments and going further into space, hardware, and climate. At a certain point I decided to branch out and focus on what I was most excited about. That's when I came across Manu at Amino Collective. He had just finished deploying Fund 1, and we really hit it off and were building towards the same ambition so we joined forces in Fund 2.

What is Amino Collective's investment thesis?

We're focused on being an early-stage health and bio fund at the intersection of where tech and AI can accelerate health and biology. We're seeing a lot of speed being applied through AI in these verticals, and I think there's a huge opportunity to change the world. LLMs are transforming the generalized tech space, but bio and health are just getting started with AI. There are lots of nuances and moats in this space that lead to big opportunities.

In terms of the fund, we typically write checks anywhere from 500k to 2 million euros. We look for the best opportunities in this space wherever they are and focus on Europe.

Where do you see the most exciting applications of AI in biotech right now?

I try to take a thesis-driven approach but also leave room to be driven by where founders are building in areas I wouldn't have thought about. Finding someone who has thought transformationally enough to completely blow my thinking out of the water is incredibly exciting.

AI for drug discovery is clearly one of the big areas and we've backed a bunch of companies in this space. In protein design, there's a lot of companies being built and good data coming out of them. You look at companies like Chai, Latent, and Boltz and the models they're putting out. We're getting really good first-time binders for targets we didn't even think we could hit before. We're starting to see models that produce drug-like molecules right from the start. It's still not perfect, but we're going in the right direction toward a world in which we can produce these peptides or antibodies in silico and get them to patients much faster.

But there's a lot more opportunity elsewhere, too. In the small molecule world, there's still a lot that can be done. AI is figuring out new synthesis routes to reach chemical space we couldn't access before. A reaction that might have taken 30 steps before to reach a starting point for drug discovery can now potentially be done in four steps. That means compounds that nobody would have bothered screening because of low yield and high cost are suddenly tractable.

I also look at companies further down the pharma pipeline. If we could simulate clinical trials and predict the chances of success for a drug before it touches a patient, that changes how we allocate capital and reduces the cost burden of R&D. It's now over a billion dollars to get a drug to market, and most of that is the cost of failures. If you can understand where those failures happen before you go through the whole expensive clinical process, you can start reducing the cost per drug and bring pricing down for patients who need access.

Has the regulatory framework kept pace with these advances?

Yes and no. A lot of these companies still have to fit the regulatory framework that already exists, and I don't think too much needs to change for many of them. If you're producing a peptide or antibody, you still need to go through the same regulatory process whether it was designed by an AI model or discovered by looking for antibodies in llamas or sharks. It's the same thing at the end of the day.

Where the regulatory process does need updating is when we start thinking about more dynamic therapeutic modalities like RNA- and DNA-based therapeutics. Having a system where you can rapidly personalize or adapt therapy to whatever challenge a patient faces requires a very different regulatory approach that allows this kind of platform technology to exist. The FDA is pushing in that direction, but it's still early days. 

The same goes for personalized medicine, where companies are now sequencing a patient's tumor and developing specific binders against cell surface antigens to deliver targeted payloads. The idea is to move toward a more personalized therapeutic approach, and to do that, you need regulation that can keep up.

What do you think about China's role in the biotech landscape?

I see China as both a threat and an opportunity, and I think everyone should view it in the same lens. Where we have to be careful is in drug discovery. If companies are outsourcing their entire design-build-test-learn loop to CROs in China just because they're cheaper and can scale faster, that's a dangerous play. You're giving away all your data and capabilities while building a competitor in a country that is very good at creating those kinds of competitors.

On the later-stage side, we've seen an unprecedented amount of cash flowing from Western pharma companies to Chinese biotechs to buy their assets. And it's not because they're cheap. It's because they're that good. I think that's a net benefit for patients overall, but for companies it's something they need to watch. The game is no longer about building a really expensive, perfect platform to find the perfect drug that is then going to be undercut by a Chinese competitor that brute-forced it with cheaper labor and better robotics.

On the flip side, I'm seeing a lot of companies now going to countries like China and Australia to run their first-in-human trials. Australia is another great example of introducing the right incentives. If you can get an investigator who wants to run a trial at a single site and you have IRB approval, you don't need full regulatory approval to run that first-in-human study. You can get data quickly and cheaply. And they provide R&D tax incentives on top of that. It's an opportunity to bypass a lot of friction that doesn't need to be there.

What do you look for in a biotech founding team?

The most important thing for any startup, and the biggest source of defensibility, is speed. How fast you move dictates how well you can execute and defend whatever IP you have. If you're building a company and you have the best IP around a technology you have to execute on it before someone else figures out a slightly different way to do the same thing, because nobody is going to want to fund a legal battle. You need to be moving fast enough on your technological moat to be able to stake your claim to ar space. You want potential competitors to come to you rather than trying to build their own workaround.

But in health and bio, the same rules don't apply as in general tech. You can't just build the plane as you fly it because patient lives are on the line. So finding founders who can balance those two things, who still move at speed but execute thoughtfully, is even harder to find. That's exactly the kind of founding team we look for.

There's a lot of talk about biotech being back. How are you reading the market right now?

The IPO window for bio has been shut quite firmly for the last two and a half to three years. There's a backlog of really good clinical-stage companies that should have gone public but haven't because of choppy waters. Now there's a window where optimism is high and bio is generally having a great time.

But these things always happen in cycles, and bio isn't protected from general public market turbulence. With what we're seeing in big tech and AI valuations, there's going to be a correction at some point. Some companies that should have IPO'd before are doing it now and having a good time. Others that were planning for later are pulling their timelines forward to take advantage of the window while they can.

So yes, bio is back in a way, but it's all a cycle. Let's take advantage of it while we can, get those companies public, and get more liquidity back into the bio market. What would be a shame is if we don't recycle that capital into the next wave of innovation in this space.

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