Isomorphic Labs Eyes Up to $50B Valuation in New Round

Isomorphic Labs, the drug discovery company spun out of Alphabet, is reportedly in talks to raise fresh capital. According to a Bloomberg report published on October 8, the company is aiming for a valuation between $40 billion and $50 billion. The report did not say how much money Isomorphic hopes to raise.

The discussions are described as early-stage. Bloomberg's sources also did not name the investors expected to take part. For context, Isomorphic's previous round, a $2.1 billion raise announced in March, drew money from Alphabet, two of Alphabet's venture capital funds and several outside investors.

What Isomorphic actually sells

The company's main product is an AI platform called IsoDDE. Its job is to cut down the slow, manual research work that goes into developing a new therapy. A large part of the platform targets one specific bottleneck: finding binding pockets.

A binding pocket is the spot on a disease-causing cell's surface where a drug attaches in order to neutralize it. Locating a good one is hard for several reasons:

1. Cell surfaces are complex. Mapping them requires specialized microscopes.
2. They keep changing. As the surface shifts, so do the pockets on it, which makes them hard to study.
3. Pockets can vanish. Under some conditions, a binding pocket disappears entirely.

In February, Isomorphic said IsoDDE was more than 50% better at finding binding pockets than the nearest competing tool. The platform can also model the molecular structure that forms once a drug locks into a pocket.

Measured against AlphaFold

The obvious benchmark is AlphaFold, the Google DeepMind model whose creators received half of the 2024 Nobel Prize in Chemistry. AlphaFold can also predict the structures that form when a drug binds to its target. Isomorphic says IsoDDE does this roughly twice as accurately.

The gap is reportedly wider for antibodies. Binding pockets are not only targeted by drugs but also by the antibodies the immune system produces. Antibodies vary structurally in ways that are hard to predict, which makes modelling their interactions with pockets especially difficult. Isomorphic claims IsoDDE handles this about 2.3 times better than AlphaFold.

These are the company's own figures. They have not been independently verified in the reporting.

How the business makes money

Isomorphic earns revenue through research partnerships with pharmaceutical companies rather than by selling software licenses on the open market. In 2024, it signed deals worth close to $3 billion combined with Eli Lilly and Co. and Novartis AG. In January of this year, it added a similar partnership with Johnson & Johnson.

All three collaborations center on small molecules, the basic chemical building blocks behind many drugs on the market today.

The Bigger Picture

A jump to a $40 billion to $50 billion valuation would put Isomorphic among the most richly valued AI startups outside the chatbot and foundation model race. That is notable. Much of the money in AI this year has gone to language models, agents and infrastructure, while scientific AI has mostly been framed as a long-term bet.

This suggests investors are starting to price AI for biology on its own terms. Isomorphic is not alone here: the Biohub-led $1.8 billion effort to model cell behavior points in the same direction. More broadly, specialized AI companies have been raising at high valuations recently, from world model developer General Intuition to robotics firm FieldAI.

The open question is whether the partnership model can justify that price. Research deals with Lilly, Novartis and J&J show demand, but drug development is slow, and a better binding pocket finder does not guarantee approved drugs. It is worth watching who leads the round, whether Alphabet keeps putting in money, and whether any partnership produces a candidate that reaches clinical trials.