Mati Gill, CEO of AION Labs
Photo courtesy of Elad Malka
SAN FRANCISCO – Mati Gill, CEO of Israel-based AION Labs, sat down with MobiHealthNews outside the JPM Healthcare Conference to discuss the purchase of AION's portfolio company CombinAble.AI by drug discovery and development company Insitro, which marked a rapid and strategic outcome for a venture built from scratch within AION Labs.
MobiHealthNews: Insitro, an AI therapeutics company based in San Francisco, acquired AION Lab's portfolio company CombinAble.AI this month. Can you tell me about the acquisition?
Mati Gill: Sure. So we're very proud that CombinAble.AI found an amazing home, first of all. CombinAble.AI is a company that we started a little over two years ago in our AION Lab's model of creating a venture from scratch – no background IP, no background technologies, no existing team. We ran an open call, a very competitive process and made the offer to a great computational scientist from Germany. She paired up with a great AI and machine learning Ph.D., but also an engineer himself as a CTO, and they raised a very small but lean and very efficient team and a brilliant team that created a great technology that, within two years, was recognized as being able to provide value to the pharma and biotech industry in general.
What I'm incredibly proud of is the fact that this was done within two years with relatively small investment, and they're being acquired by one of the best and most respected scientific growing biotech companies in the world.
MHN: And this happened quickly.
Gill: It happened very quickly. We knew several of the players, especially the chief scientific officer of Insitro, with whom I have had a relationship with for years. Back in his days, when he was still at Amgen, he visited AION Labs for the first time in Israel. Did two visits, actually, and got to know us.
When CombinAble.AI was ready to start providing value for those who wanted to develop antibodies, they were in touch – Insitro and CombinAble.AI, thinking about potential projects they could do together. But CombinAble.AI started thinking strategically that the right thing for them was to look for an acquisition with a strategic player, basically look for a new home instead of being an independent startup. And we went first to Insitro and a couple of others that were looking at the technology to possibly do things with, had already got to know the technology, got to know the team, had respect for them, and so, thankfully, Insitro jumped on the opportunity.
MHN: How quickly was the acquisition, as far as talking about Insitro acquiring and finalizing the acquisition?
Gill: About three months, three or four months. They had known each other before that for quite a few months, and had already done initial due diligence.
So I think that helped to catalyze a process that there were some steps that had already been done that would have been necessary to do, had we started from scratch. But once the initial discussions started about a potential acquisition, until the final decision was signed, about three or four months.
MHN: Why was it so fast?
Gill: It's a good question. So first of all, they didn't start from scratch. They had already done some initial due diligence and checks, and they knew the team. So they were starting already in a place of mutual respect on the science and technology level.
And I think, you know, I don't want to speak for Insitro, but I'll give you my reflection on what I feel helped them is that they knew exactly what they wanted, and I respect when a company of their size knows what they want and just decides to go get it. And they knew within what parameters they were willing to do it. And they were very transparent and very straightforward about their intentions, about what they wanted and what they could and could not do, or would and would not do. And that's the way I like to do business – very transparent, very straightforward.
So I think all the negotiations started on the right foot and never went to the left one. So it really was built on a very straightforward foundation of trust and very straightforward interest of creating a win-win for everybody, for the CombinAble.AI team, for the AION Lab stakeholders and shareholders as well as, of course, for Insitro, as they're the acquirers, and it was important for us that they be happy out of all this.
MHN: What is the significance of this acquisition?
Gill: The deal is significant in two different aspects – for AION Labs and for Israel.
For Israel, first and foremost, it kind of is the first-ever acquisition of an AI pharma company in Israel, full stop, and it's the first R&D center. Even though it's starting off small, it's the first R&D center of a U.S.-based biotech company in Israel, especially of the size of Insitro that's already raised several hundred millions of dollars, has income from partnerships with the best pharma companies in the world. So then, establishing an R&D site in Israel is significant, and it's a validation, I would say, that Israel has great science, has great technology and can build technologies for the pharma industry that drive value right.
And I think for that, to welcome a company like Insitro, with their leadership, with their expertise, with the respect that the industry holds for them in Israel, is very significant for the Israeli ecosystem.
Secondly, for AION Labs, I think it's a nice validation, another milestone validation that our model can actually build good companies, do good science, and drive value for the industry in relatively short timelines with relatively small amounts of investment. So, we're very happy that we were able to build a team from scratch, and now they're Insitro in Israel.
