Isomorphic Labs Is Said to Be Chasing a $40 Billion Valuation

Isomorphic Labs, the drug-discovery company Alphabet spun out of DeepMind, is in early talks to raise new funding at a valuation of at least 40 billion dollars, Bloomberg reported on October 8th. One person familiar with the discussions put the possible figure as high as 50 billion. The round has not closed, and the terms could still move.

What makes the number worth a second look is how recent the last one is. Isomorphic closed a 2.1 billion dollar round only in May, backed by Thrive Capital, Alphabet, and the UK's sovereign AI fund. Reporting at the time pegged its value at roughly 17.5 billion. If the new talks land anywhere near 40 billion, the company will have more than doubled in the eyes of investors in about five months, without a drug on the market to show for it.

That is the tension running underneath the headline. Isomorphic's pitch is that the protein-structure work behind DeepMind's AlphaFold, which won its creators a share of the 2024 Nobel Prize in Chemistry, can be turned into a machine for designing medicines faster and more cheaply than the usual trial and error. It has signed research deals with Eli Lilly, Novartis, and Johnson & Johnson. What it has not yet done is put a molecule it designed into a human and shown that the approach works where it counts, in the clinic.

Betting on the model, not the medicine

So investors are being asked to price a method rather than a product. That is familiar territory in AI, where valuations increasingly run ahead of revenue, but it lands differently in drug development, a field with long timelines, strict regulators, and a long history of promising computational tools that did not survive contact with biology. The money says the method is credible. The absence of an approved drug says the proof is still pending.

Isomorphic is not alone in drawing that kind of capital on the strength of the underlying science. The field has produced a run of eye-catching results lately, from DeepMind watermarking its AI-designed proteins to academic teams using models to surface new classes of molecular glue. The science is moving. Whether it moves fast enough to justify a 40 billion dollar price tag is the question the round will test.

Alphabet remains the majority owner, and chief executive Demis Hassabis declined to disclose its stake during the spring raise. The figures here come from a single Bloomberg report and the outlets that followed it, so they are best read as the opening position in a negotiation rather than a settled valuation. The company has not commented publicly on the talks.