ALLOX has raised €9.4 million in seed financing to expand its AI-assisted drug discovery platform and advance small-molecule research targeting proteins that have proved difficult to target with medicines.

Seed funding to expand drug discovery platform

Barcelona-based biotechnology company ALLOX has closed a €9.4 million seed financing round to expand its drug discovery platform and develop a pipeline of small-molecule candidates targeting challenging proteins.

The round was led by Asabys, through its Sabadell Asabys II fund, with participation from Spain’s Centre for the Development of Technology and Innovation (CDTI), through its SICC Innvierte initiative, and the Institut Català de Finances (ICF).

The company plans to use the funding to expand its experimental research capabilities, develop artificial intelligence (AI) models and strengthen its internal drug discovery team. It also intends to establish research collaborations with pharmaceutical and biotechnology companies.

ALLOX combines high-throughput experimental biology, genetics and computational methods to investigate how proteins function and interact. Its platform aims to identify allosteric sites, which are regions of a protein that can be targeted to influence its activity without necessarily binding to the primary site where its natural partners or substrates interact.

The approach is intended to help researchers identify potential drug targets among proteins that have historically been difficult to address with conventional small-molecule medicines.

Targeting difficult-to-drug proteins

ALLOX focuses on allosteric modulation, protein-protein interactions (PPIs) and transcription factors.

PPIs enable proteins to interact with one another to carry out biological functions. Disrupting or modifying these interactions could offer therapeutic opportunities, but developing small molecules that selectively influence them can be challenging.

Transcription factors regulate gene expression by controlling which genes are switched on or off. Although they are important in many disease processes, developing drugs that directly target these proteins has proved difficult in numerous cases.

ALLOX’s platform measures the functional effects of thousands of mutations in parallel to investigate how changes in protein structure influence activity and interactions.

The company intends to use these experimental datasets to train AI models that predict potential therapeutic hotspots. These predictions could help researchers identify sites suitable for small-molecule binding and prioritise targets for further drug discovery.

However, the approach remains a drug discovery strategy rather than evidence of an effective treatment. The announcement did not disclose specific drug candidates, preclinical efficacy results or clinical programmes.

The funding will support the development of proprietary drug discovery programmes, although ALLOX has not provided details of individual assets or their anticipated development timelines.

Biotech executive joins as board chair

Alongside the financing, ALLOX has appointed Morten Graugaard as independent chair of its board.

Graugaard is currently chief business officer at Orbis Medicines, a company developing oral biologic medicines. He previously held investment and corporate development roles at Novo Holdings and Lundbeck.

At Lundbeck, he led the company’s acquisition of Chelsea Therapeutics, valued at approximately $658 million, and participated in negotiations for a global alliance with Otsuka Pharmaceutical.

He has also held board and advisory positions at biotechnology companies, including Syndesi Therapeutics, which AbbVie agreed to acquire in a transaction valued at up to $1 billion in 2022.

Júlia Domingo, chief executive officer 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.”

Graugaard’s appointment adds experience in biotech company development, investment and business strategy as ALLOX moves to expand its research platform and establish a proprietary drug discovery pipeline.

The company’s next significant milestones will be demonstrating how its experimental and computational approach translates into validated drug targets and specific therapeutic candidates.