Xellar Biosystems Secures Tens of Millions in Angel Funding to Advance AI-Powered, High-Throughput Organ-on-a-Chip Platform for Automated Drug Discovery Based on 3D Cellular Morphology Analysis

Recently, Yaosu Technology, a 3D-Wet-AI startup that combines high-throughput organ-on-a-chip technology with artificial intelligence for drug discovery, announced that it had oversubscribed its multi-million-dollar angel financing round. The round was jointly invested by Legend Capital, ZhenFund, and Yayi Capital. It is reported that the funds will be used to expand the R&D team at Yaosu Technology’s Boston Center, establish an Asia-Pacific Center, and build a high-throughput organ-on-a-chip wet-lab platform as well as an AI-based 3D cell image analysis platform.

Xellar, Inc. was founded in Boston, USA, at the end of 2021. It is understood to be the world’s first company to utilizeOrgan-on-a-ChipIntegrating High-Content 3D Cell Imaging, Computer Vision (CV), and Artificial Intelligence (AI)Conducting drug discovery“3D-Wet-AI”Biotech startup.

Organ-on-a-chip is a three-dimensional dynamic biochip system that reconstructs cellular structures, biomechanical forces, and cell–cell interactions in vitro through engineering approaches, thereby simulating tissue and organ functions. This frontier technology, which integrates multiple disciplines, was listed by Science magazine and the World Economic Forum in Davos as one of the “Top 10 Emerging Technologies.” Dr. Xin Xie, Co-founder and CEO of Xellar Biosystems, completed his postdoctoral research on organ-on-a-chip and engineered living systems at Harvard University. He subsequently joined TransMedics, Inc. (Nasdaq: TMDX), a global leader in innovative medical device R&D for organ transplantation, where he served as Head of Biomedical Engineering and Systems Engineering, leading the development of next-generation technologies for prolonged ex vivo organ preservation. Dr. Xie resigned in late 2021 to found Xellar Biosystems, embarking on the industrial application of high-throughput organ-on-a-chip platforms. It is reported thatThe founding team members of Yaosu mostly come from renowned multinational biopharmaceutical companies and top research institutions such as Harvard University and the Massachusetts Institute of Technology,With extensive experience in industrial pharmaceutical product development and cutting-edge R&D in biology and AI technologies. The organ-on-a-chip and bio-3D printing initiatives at Yaosu Technology are led by the globally renowned scholar Professor Y. Shrike Zhang from Harvard University. Meanwhile, the company maintains close scientific collaboration with Professor Donald Ingber of the Wyss Institute at Harvard University, a member of three U.S. national academies, a pioneer in the field of organ-on-a-chip technology, and the inventor of the world’s first organ-on-a-chip. Professor Polina Golland from the Computer Science and Artificial Intelligence Laboratory (CSAIL) at the Massachusetts Institute of Technology serves as the Chief Scientific Advisor for Computer Vision and AI at Yaosu Technology. She is the founding developer of CellProfiler, the most widely used software for computer vision and cell morphology analysis. Currently, Yaosu Technology is building an interdisciplinary, composite international R&D team, continuously exploring and developing the industrial applications and frontier new technologies of organ-on-a-chip, computer vision, and artificial intelligence in drug discovery.

For a long time, two-dimensional cell culture and animal models have been important research tools in basic biomedical research and preclinical drug development; howeverMore than 90% of candidate drugs that perform well in preclinical studies fail in human clinical trials.How to Optimize Preclinical Models to Accelerate Drug Development Is One of the Biggest Challenges Facing the Entire Biopharmaceutical IndustryOrgan-on-a-ChipIt is a new technology that emerged to address this challenge,It provides human cells with a three-dimensional, physiologically relevant in vitro growth environment that more accurately reflects the true effects of drugs on the human body.Identifying safe and effective drug candidates for subsequent development at the earliest preclinical stage can shorten the drug R&D cycle, improve the efficiency of new drug development, and reduce investment losses caused by drug safety issues. Growing clinical evidence has demonstrated the advantages of organ-on-a-chip technology in drug screening and new drug development.The U.S. Food and Drug Administration (FDA) is also collaborating with pharmaceutical R&D companies to promote the use of organ-on-a-chip technology to improve the approval process for predicting whether new drugs are safe and effective in humans.

In February this year, the Wyss Institute at Harvard University conducted drug testing and development work using organ-on-a-chip technology in the field of pulmonary diseases. By leveraging lung-on-a-chip platforms, researchers rapidly screened for and identified a marketed drug with specific therapeutic efficacy against coronavirus disease 2019 (COVID-19) and chronic obstructive pulmonary disease (COPD). The findings were published in Nature Biomedical Engineering, and the related patents were licensed to Cantex Pharmaceuticals, enabling the company to seek U.S. FDA approval for Phase II clinical trials. It is reported that this isThe first use of organ-on-a-chip data in an FDA Investigational New Drug (IND) application marks a milestone of significant importance.Dr. Bai Haiqing, the primary contributor to this work, has recently joined Yaosu Technology in a full-time capacity as the Head of Biotechnology, leading the team in the development of organ-on-a-chip disease model platforms and biological systems. Coincidentally, pharmaceutical giant Sanofi (Nasdaq: SNY) also submitted an Investigational New Drug (IND) application to the FDA this July for a new indication. This submission combined safety data from the drug’s use in its original indication with efficacy data for demyelinating diseases obtained using organ-on-a-chip technology. The clinical trial has received FDA approval and patient recruitment has commenced. It is understood that global regulatory agencies are progressively promoting the application of new in vitro 3D cell culture technologies, such as organ-on-a-chip, in drug development through policy and regulatory frameworks. The European Union plans to enact legislation in 2023, which will take effect from 2027.Comprehensive Ban on the Use of Animal Testing in New Drug Development; In June 2022, the U.S. Congress passed the FDA Modernization Act, formally revising the term “animal testing,” which had been used for nearly a century in drug development, to “non-clinical testing.” This means that animal testing is no longer the sole method for non-clinical efficacy testing and evaluation.For the first time in history, organ-on-a-chip and computational modeling technologies have been incorporated into the “non-clinical testing” system for efficacy evaluation.Meanwhile, the Center for Drug Evaluation (CDE) of China's National Medical Products Administration also in late 2021First use of organoids, 3D tissue models, and microfluidic models as validation tools for the efficacy and safety of gene and cell therapies.These new regional policies all mark a paradigm shift in the drug development process.

Xellar, Inc. pioneered theThe integration of high-throughput organ-on-a-chip technology with computer vision techniques based on cell morphology,While providing more accurate models for disease and drug efficacy assessment,Leveraging large-scale organ-on-a-chip technology to automatically generate 3D cellular bioimages, and combining this with artificial intelligence to rapidly screen for candidate drugs with the highest development value and potential.It is understood that Yaosu chose to leverage 3D cellular imaging data for new drug development because image-based datasets offer higher density and lower costs compared to high-dimensional datasets generated by other omics technologies. Furthermore, this approach can more objectively reflect disease states and drug efficacy without prior assumptions or human interference. Meanwhile, significant advancements in computer vision, as well as increasingly sophisticated biological imaging and image processing technologies over the past decade, have provided unprecedented tools for phenotype-based drug development. With strong technical expertise and talented teams in organ-on-a-chip technology, disease modeling, and AI-driven image analysis, combined with laboratory automation, Yaosu Technology aims to build development pipelines for various diseases in the future, accelerating the launch of innovative drugs and therapies to the global market.

Dr. Xin Xie, Co-founder and CEO of Yaosu Technology“We are deeply grateful to our investors for their recognition of our 3D-Wet-AI technology roadmap, which integrates wet-lab organ-on-a-chip experiments with AI-driven new drug development, as well as for their trust in the Xellar Biosystems team. Over the past decade, organ-on-a-chip technology has experienced rapid growth and undergone extensive scientific and clinical validation, demonstrating its unique advantages and accuracy in drug testing. The founding team of Xellar Biosystems brings together leading scientists and engineers in the fields of organ-on-a-chip and bioimaging AI. Building upon our patented high-throughput organ-on-a-chip experimental platform and integrating advanced computer vision technologies, we aim to enhance the accuracy of AI algorithms for efficacy assessment based on 3D cellular morphological analysis through continuous feedback training between wet-lab experiments and AI models. Beyond collaborating with pharmaceutical companies to conduct drug testing using Xellar’s organ-on-a-chip and cellular imaging platforms, more importantly, we plan to leverage AI combined with our proprietary 3D Wetlab database to generate drug pipelines in a chip-based, low-cost, and high-efficiency manner for clinical trials. This represents another highly exciting industrial application of our technology. The endorsement of organ-on-a-chip and AI technologies by the FDA and regulatory agencies worldwide further validates the direction of our technological roadmap. We believe that Xellar Biosystems’ increasingly standardized, automated, and industrialized dry-wet integrated 3D-Wet-AI technology will play a significant role in food safety, drug safety, and drug development.”

Scientific Advisor for Organ-on-a-Chip at Yaosu Technology, Professor Y. Shrike Zhang of Harvard Universitystated: “We thank our investors for their support of Yaosu Technology. We believe the prospects for organ-on-a-chip technology in drug screening and related fields are limitless. By integrating unique wet-lab organ-on-a-chip experiments with artificial intelligence, Yaosu Technology has advanced a technical development philosophy that better addresses the throughput and automation challenges inherent in traditional organ-on-a-chip systems. This innovation marks another breakthrough in the field, making it truly feasible to propel organ-on-a-chip technology to the forefront of drug testing and clinical new drug applications.”

Chen Rui, Co-Chief Investment Officer of Legend CapitalIt stated: “Legend Capital has consistently focused on the deep integration of frontier technologies with the healthcare industry. The Xellar team’s technological foundations stem from Harvard and MIT, with its organ-on-a-chip and AI medical imaging sectors led by globally preeminent professors. Although the company was recently established, the team already boasts a well-rounded organizational structure and extensive industry experience. We are optimistic that Xellar will leverage its multidisciplinary ‘3D-Wet-AI’ approach—combining high-throughput cellular imaging based on real-time 3D cellular feedback with AI technology—to facilitate drug testing, target discovery, and new drug development, thereby becoming a world-class enterprise in the field of novel therapeutics R&D.”

Fang Aizhi, Founding Partner and CEO of ZhenFund“We believe that the integration of computational methods and wet-lab experiments will bring about significant innovation in the biotechnology sector. We are also optimistic about Yaosu Technology’s globally distributed team and their accumulated expertise across the organ-on-a-chip value chain, and we look forward to supporting them in driving long-term, transformative change for the global pharmaceutical industry.”

Liu Chong, Founding Partner of Yayi CapitalIt stated: “In recent years, as the challenges of drug R&D have continued to mount, with investment no longer proportional to returns, pharmaceutical companies, biotech firms, and research institutions worldwide have been committed to integrating drug development with technologies such as artificial intelligence (AI), high-throughput automation, and microfluidics. This approach aims to reduce the costs and risks associated with drug discovery while improving efficiency and return on investment. Organ-on-a-chip technology is the outcome of converging multiple research disciplines; a complete organ-on-a-chip system involves microfluidics, stem cells, tissue engineering, microelectronics, and other technologies. Recently, organ-on-a-chip technology has helped accelerate preclinical studies and clinical trial applications for institutions such as Harvard University’s Wyss Institute and Sanofi, particularly in early-stage drug screening and efficacy data collection. This has successfully demonstrated its commercial value and gained recognition from relevant regulatory authorities. We believe that organ-on-a-chip technology is entering a fast-track development phase. We are also confident that Dr. Xin Xie and his team will fully leverage the differentiated and complementary resources available in China and the United States. By closely integrating high-throughput organ-on-a-chip technology with AI, they will truly empower drug R&D across various therapeutic areas—especially in rare diseases lacking animal models—while delivering both commercial and social value.”