Before biopharmaceutical companies raise money from venture capital firms, their early funding often comes from the U.S. government in the form National Institutes of Health grants. That was the case for Recursion Pharmaceuticals, a now publicly traded company that applies artificial intelligence to drug discovery and development. With layoffs at the NIH underway and its grant funding programs in limbo, Recursion is stepping in to fill in some of the funding gap for biotech startups.
Altitude Lab, a biotech accelerator formed by Recursion, on Wednesday announced the launch of a pre-seed venture fund to support early-stage startups affected by the changes in federal funding policy. Altitude Lab Fund will provide pre-seed investments of $100,000 to $250,000 as well as 12 months of lab and office space at the Altitude Lab facility in Salt Lake City.
Funding awards also come with admission to the Altitude accelerator program, which provides mentorship from industry executives and connections to national funds that could be sources of future investment. According to Altitude Labs, startups incubating there have collectively raised $154 million in early-stage funding since the accelerator’s launch.
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“Recursion founded Altitude Lab in 2020 to fuel more founders and enable more audacious companies in our industry,” Chris Gibson, Recursion CEO and Altitude Lab board chairperson said in a prepared statement. “This fund is Altitude Lab’s way of supporting and accelerating the science on which our industry stands.”
Recursion Pharmaceuticals formed in 2013, co-founded by Gibson. Three years later, the young company raised its Series A round of funding. Gibson said NIH small business innovation research (SBIR) grants in Recursion’s early years allowed the young company to build the fundamentals of its technology platform. The company was able to go on to raise more than $1 billion in private investment. Recursion currently has eight drug candidates in clinical development.
In 2019, Recursion established the Recursion Foundation, a vehicle for charitable and philanthropic efforts. Altitude Lab was the first effort of the foundation. According to Recursion regulatory filings, the biotech’s board of directors has committed to putting 1% of the company’s equity into the foundation “to help demonstrate the strong commitment we have to social responsibility and to ensure a sustainable future for our work in this arena.”
Altitude Lab was conceived with an emphasis on working with underrepresented founders. One key goal is for their startups to grow permanently in Utah. The accelerator has since become part of a larger regional economic development vision in partnership with the University of Utah.
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The Altitude Lab Fund will be led by Gibson alongside David Bearss, the CEO of Lehi, Utah-based Halia Therapeutics, and Altitude Executive Director Chandana Haque.
Startups seeking NIH funding have their applications go through two levels of review. Applications are scored on a scale that assesses the potential impact of a technology. The scale ranges from 10 to 90, with 10 being the best score. Altitude Lab said its new fund is open to startups that have received an impact score of 20 or less. Applications may be submitted here.
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