System1 Biosciences Secures $25M Series A Financing Led by Pfizer Ventures to Advance AI-Driven Phenotypic Drug Discovery for Neuropsychiatric Disorders

Recently, VCBeat (WeChat ID: VCbeat) learned that neurotherapeutics startup System1 Biosciences announced on the 12th of this month that it had completed a $25 million Series A financing round.

Previously, System1 Biosciences raised venture capital to build a development platform for psychiatric and neurological drugs, with the funding amount undisclosed. It is reported that this round of financing was led by CRV and Pfizer Ventures, followed by ten other institutions including Riot Ventures. The funds will be primarily used to complete System1 Biosciences’ drug discovery program.

System1 Biosciences, based in the San Francisco Bay Area on the U.S. West Coast, was co-founded by Dr. Escola, Assistant Professor of Neurology at the University of California, and Dr. Saul Kato. Dr. Escola also serves as Professor of Psychiatry at Columbia University. Following the completion of its Series A financing, George Zachary, General Partner at CRV, and Dr. Margi McLoughlin, Partner at Pfizer, will join System1 Biosciences, while Dylan Morris of CRV and Laszlo Kiss of Pfizer will serve as board observers.

System1 Biosciences leverages phenotypic screening to discover novel therapeutics for complex neurological and psychiatric disorders, including epilepsy, autism, and schizophrenia. Currently, existing technologies have yet to achieve breakthrough progress in developing drugs for these conditions. The innovative approach employed by System1 Biosciences integrates brain organoid science, systems neuroscience, robotic automation, and advanced data analytics, enabling the identification of disease features that were previously undetectable.

System1 Biosciences’ drug discovery platform utilizes stem cell lines derived from patients with brain disorders to cultivate brain organoids, also known as three-dimensional (3D) in vitro systems. By leveraging these 3D in vitro models, researchers are able to identify potential compounds and compare their efficacy against that of standard pharmaceutical approaches, thereby uncovering more clinically effective neurological therapies.

Brain organoid culture is a major application scenario for artificial intelligence. System1 Biosciences states that its machine learning algorithms can collect large-scale, high-capacity datasets across multiple biometric modalities and under diverse conditions. According to System1 Biosciences, datasets processed through analytical pipelines will delineate system-level features, termed “deep phenotypes.” These deep phenotypes may be undetectable using conventional techniques, thereby enabling researchers to identify potential drug targets and therapeutic regimens for more effective treatment of neurological and psychiatric disorders.

Compared with target-based single-biomarker screening, System1 Biosciences’ multimodal phenotypic technology can more efficiently identify more promising drug candidates. We recognize that a prerequisite for a compound to be identified as a potential drug candidate is its ability to coherently modulate multiple disease-related factors. At System1 Biosciences, this process is precisely executed by AI.

Furthermore, multimodal screening enables the identification of multi-drug regimens and combination therapies, thereby facilitating the use of multiple biological network interventions to track disease pathogenesis and systematically uncover complex brain disorders.

“I am excited that System1 Biosciences is welcoming new partners, giving us the opportunity to apply our biotechnology platform at the scale required for developing novel therapeutics for neuropsychiatric disorders,” said Escola.

“We are thrilled to support System1 Biosciences, as they have an incredible team, advanced insights, and technology that can fundamentally improve people’s neuropsychiatric conditions,” said George Zachary, who is equally enthusiastic about the collaboration. “When our team first learned of it, System1 Biosciences’ novel breakthrough approach was striking.”

Dr. Margi McLoughlin added, “As part of Pfizer’s new neuroscience investment strategy, we are funding promising early-stage research companies. We are delighted to support teams like System1 Biosciences, which has created an industrialized system for novel target identification and drug screening.”

VCBeat has previously published in-depth coverage on overseas “AI + New Drug Development.” In recent years, a growing number of startups have been applying software-based approaches to drug discovery and development. Among them, startup pharmaceutical companies that leverage artificial intelligence and machine learning algorithms, such as System1 Biosciences, often attract substantial funding from venture capital firms and large pharmaceutical companies.

However, “AI + New Drug Development” remains a nascent field, with most initiatives still in their early stages.

Encouragingly, some companies have made significant progress. In July this year, the Investigational New Drug (IND) application submitted by Recursion, a Salt Lake City-based pharmaceutical company, was approved by the U.S. Food and Drug Administration (FDA). Subsequently, Recursion began applying machine learning to Phase I clinical trials of its drug candidates. The company aims to discover 100 drug candidates using AI/ML by 2025.

CRV is a venture capital firm with a 47-year history, specializing in investments in early-stage technology companies, with a particular focus on enterprise and consumer services as well as biotechnology firms. To date, CRV has invested in nearly 400 startups, including prominent companies such as Twitter, Zendesk, Amgen, HubSpot, Parametric Technology Corporation, Yammer, EqualLogic, and Sonus Networks. Half of the companies in CRV’s portfolio have gone public or been acquired.

Pfizer Ventures (PV) is the venture capital arm of Pfizer Inc., established in 2004. It invests in areas aligned with Pfizer’s current and future strategic interests, focusing on potential transformative therapies, neuroscience, platform technologies, diagnostics, drug delivery, and pharmaceutical services. PV seeks to remain at the forefront of advancements in life sciences by identifying and investing in emerging companies that are developing transformative drugs and technologies, with the potential to enhance Pfizer’s pipeline and shape the future of the pharmaceutical industry.