The Company that Spawned Moderna Just Raised $3.6 Billion to Back more Big Ideas in Life Sciences

Some of those questions, she said, are “killer questions, where if we can’t answer this, there is not really a path forward.” Assuming those questions get answered, the company reaches the “NewCo” phase, where it gets more money from Flagship to keep developing its approach and often recruit a chief executive from outside to lead it. By the fourth phase, “GrowthCo,” the company has typically moved out of Flagship’s office into its own space, and other investors have put in money.

“I’m not going to throw shade,” says Chris Garabedian, a former biotech CEO who now manages investments for Perceptive Advisors, a New York firm. “They’re doing things that no one else has the risk appetite to do.”

Margo Georgiadis, a former chief executive of Ancestry.com and Mattel, is running a Flagship company called Montai, which is using artificial intelligence to try to identify naturally occurring molecules in foods, herbs, or traditional medicines that may be useful in treating inflammatory and autoimmune disorders. Georgiadis said that the other Flagship company CEOs often share expertise.

“It’s an amazing shared network,” she said. “You get the benefits of being a big company, even though you’re a small company.”

Steve Hahn, a former FDA commissioner, runs a Flagship company called Harbinger Health. It is developing laboratory tests to spot cancers earlier. While Hahn didn’t want to be specific, Harbinger has in the past mentioned pancreatic cancer as one potential target for its tests.

Flagship also works in agricultural biotech; one startup, Invaio, is marketing a device that injects a specially designed biological compound into citrus trees to slow the spread of a blight that diminishes their productivity.

Not every company that Flagship launches is a success. Among the flops: Kaleido Biosciences, which aimed to treat diseases related to the body’s microbiome, or colonies of bacteria that live in and on people; Ohana Biosciences, which was working on ways to improve fertility rates; and Joule Unlimited, which hoped to modify bacteria to crank out biofuel.

But Afeyan said that he views some of the firm’s failures as learning experiences — albeit expensive ones. It’s tough to create a biofuel that can be produced at sufficient volumes and low enough prices to compete with gasoline and diesel. Instead, he suggested, future Flagship sustainability startups may seek to sell new technologies and tools to the established energy companies.

One criticism that outsiders sometimes lob at Flagship is that Afeyan gets involved in every decision, no matter how minor. He doesn’t exactly deny it, saying it is “partly an impression and partly a necessity.”

Afeyan, who earned a doctorate in biochemical engineering from MIT, said that at times he is deeply invested in developing the science. At other times, he may be involved in only “5 percent of the decisions.”

The new $3.6 billion will create even higher expectations for Flagship, said Garabedian. The investors fronting that money will want to see Flagship continue its parade of successful public companies such as Moderna or Sana Biotechnology, a Seattle company developing cell therapies to treat cancer.

But, Garabedian added, Flagship has the confidence needed to develop or find technologies that will one day be extremely valuable.

“Noubar is really good at that — painting a vision of the future of medicine,” Garabedian said.

Afeyan’s latest vision involves artificial intelligence and how it will change the way science and drug development are done. In 2022, Flagship began building its own internal team of AI specialists. That team consists of 15 people, but Flagship expects to double its size over the next year.

Afeyan says that AI could eventually become a tool that does much of the work of scientific discovery. People would propose new scientific hypotheses and specify experiments, leaving AI to conduct the experiments and gather the results to prove or disprove those theories.

But he acknowledges that, for now, is still just a vision. “There’s a lot of work between that, and rigorously and humbly trying to bring parts of it to life,” he says. “We think it’s better to have done it than to say you’re going to do it.”