ALLOX has raised $10.5 million in seed financing to expand its experimental drug discovery platform, develop proprietary AI models and advance small-molecule programmes targeting historically difficult-to-drug proteins.

The Barcelona-based biotechnology company will use the funding to expand its high-throughput biophysical capabilities and build a pipeline targeting protein-protein interactions (PPIs) and transcription factors.

The financing was led by Asabys, through its Sabadell Asabys II fund, with participation from Spain’s CDTI through its SICC Innvierte programme and the Institut Català de Finances.

ALLOX also appointed Morten Graugaard as independent chair of its board. Graugaard brings more than 20 years of experience in life sciences investment, research and development, business development and biotechnology company leadership.

ALLOX targets difficult-to-drug proteins

ALLOX combines high-throughput genetics, experimental biology and artificial intelligence to identify functional regions of proteins that regulate their folding and interactions.

Its platform measures the effects of thousands of mutations in parallel to map functional hotspots, including allosteric and orthosteric sites and other regulatory regions that could provide opportunities for drug development.

Orthosteric sites are the regions where a molecule naturally binds to its target, while allosteric sites are separate regions where binding can influence a protein’s activity or interactions.

Identifying these alternative binding sites could help researchers develop small molecules against targets that have historically been difficult to address using conventional drug discovery approaches.

These include intracellular protein-protein interactions and transcription factors, which regulate gene expression and play important roles in cellular processes.

The company plans to use its experimental datasets to develop proprietary AI models capable of predicting therapeutic hotspots and guiding the identification of potential drug candidates.

Seed funding to advance small-molecule pipeline

The $10.5m financing will support expansion of ALLOX’s experimental platform, development of its AI capabilities and recruitment to strengthen its internal drug discovery team.

The company also plans to advance multiple discovery programmes towards a focused pipeline of proprietary small-molecule assets.

Alongside its internal research, ALLOX intends to establish strategic research collaborations with pharmaceutical and biotechnology companies.

Júlia Domingo, CEO and co-founder of ALLOX, said: “This financing marks an important milestone, enabling us to advance our internal drug discovery pipeline while expanding the capabilities of our experimental platform and proprietary AI models.”

She added: “By combining large-scale functional data with predictive AI, we aim to unlock a much broader range of challenging drug targets and accelerate the discovery of truly differentiated small-molecule therapeutics.”

The approach combines experimental measurements with computational predictions, with the aim of generating functional information about proteins rather than relying solely on identifying molecules that bind to them.

Biotech executive joins ALLOX board

Graugaard joins as independent chair, bringing experience in biotechnology investment, company building and pharmaceutical transactions.

He is currently chief business officer of Orbis Medicines, an AI-focused oral biologics company he helped establish and scale, initially serving as executive chair before becoming CEO.

Previously, he was a partner and investment director at Novo Holdings and director of corporate development at Lundbeck.

At Lundbeck, he led the company’s $658m acquisition of Chelsea Therapeutics and participated in negotiations for a $1.8bn global alliance with Otsuka Pharmaceutical.

He has also held board and advisory positions at several biotechnology companies, including Syndesi Therapeutics, which was acquired by AbbVie in 2022 in a deal worth up to $1bn.

Graugaard said: “ALLOX is addressing one of the most important challenges in drug discovery by unlocking therapeutic opportunities that have historically proven difficult to drug.”

He added: “Importantly, ALLOX fills a critical data gap, enabling the development of functional molecules rather than simply identifying binders.”

The appointment and financing will support ALLOX as it develops its platform and seeks to translate its protein research into a proprietary small-molecule drug discovery pipeline.