Terray Therapeutics has raised a $120 million Series B round, aiming to get its first drug candidate into the clinic while advancing in its AI-fueled approach to making molecules.
Founding CEO Jacob Berlin exclusively told Endpoints News that the 110-employee startup is generating the “key dataset missing for AI-driven drug discovery” in studying billions of protein-small molecule interactions. Terray has developed tiny chips that can generate more biological data than previously possible.
Berlin has spent the past 12 years developing these chips, or microarrays, which are about the size of a nickel and contain millions of wells to hold molecules in place. He left a tenured professorship at City of Hope to start Terray in 2018, which now operates out of a 52,000-square-foot laboratory in the foothills of Los Angeles. The biotech uses these chips to see how tens of millions of molecules bind — or don’t — to a protein of interest.
That echoes a common refrain that AI breakthroughs only happen with enough of the right data. And getting those biological data require the right hardware. In the case of the recent Nobel Prize-winning protein model, AlphaFold, it was built off the Protein Data Bank, a painstakingly curated public resource that itself was accelerated by then-new crystallography and sequencing machines.
Terray has generated its own proprietary dataset of protein-molecule interactions 50 times larger than publicly available data. The biotech has used that data to train AI models to discover and design small molecules in a new way for a biopharma company, placing the AI’s ideas at the center of its R&D process.
The question is if these chips, data and models will ultimately make better drugs. Terray’s Series B will provide multiple years of runway to start finding an answer, which includes aiming to enter the clinic with its lead drug in 2026, Berlin said. Terray is keeping its pipeline under wraps, beyond disclosing a general focus on immunology.
Terray is one of several AI bios taking that chance to build its own pipeline. AI-focused startups also working on small molecules include Iambic Therapeutics, Exscientia and Atomwise. Terray CFO and COO Eli Berlin, the brother of the CEO, said the biotech’s hardware has been key in attracting investors in this market.
“People recognize the difference in our story,” he said. “That hardware innovation really resonated, because it lets us build these scaled datasets that are precise and iterate rapidly.”
Generating molecules from scratch with AI
Terray’s chips helped design its first molecules, which Jacob Berlin said are often in new chemical space.
“Every single molecule we bring forward has a scaffold that has been de novo discovered and optimized at Terray from the ground up,” Berlin said. “That’s totally different than what you see across the ecosystem, where AI models have to stay close to historical sets of data because they don’t have our hardware innovation.”
Terray’s process starts by studying a protein target of interest against 80 million molecules, synthesized on nanoscale beads and placed on its chips. After first looking for binding molecules, they then zoom in on the hits to run more screens.
As Terray brings compounds into lead optimization or the stage of refining a lead into a drug candidate, AI models suggest what to do next. Humans still make the decisions, Berlin said, but AI increasingly shapes Terray’s experiments.
For instance, the company built a diffusion model to generate small molecules. In an August preprint, Terray’s team put their own twist on the diffusion architecture. They require it not only to diffuse out from a starting molecule to generate new compounds but also to diffuse backward to that starting point. That acts like guard rails in restricting the model’s creations, discouraging it from generating radically different molecules.
“Computationally, it basically inherently bounds just how wild it gets,” Berlin said.
For the molecules at the end of this process, Terray is keeping them under wraps, but Berlin said they have completely new designs that may raise some industry eyebrows.
“In every case, med chemists would be surprised. They would say, ‘Huh,’” he said. “I’m surprised by what we find and what we move, so I think other people will be too.”
Editor’s note: This story has been corrected in referring to Terray’s chip as microarrays, not microassays.