The number
The valuation Bloomberg reports would price Isomorphic like a mature, revenue-generating biotech giant. Except Isomorphic has no approved drug, no Phase 3 data, and no Phase 1 data either. The entire thesis is that its AI compresses the early design phase of drug discovery without hurting the odds downstream. Nobody outside the company has seen that hold up in patients yet.
The step-up is striking. In May, Thrive Capital led a $2.1 billion Series B at an undisclosed valuation. Five months later the ask is at least $40 billion. These are early-stage talks and Bloomberg's sourcing leaves room for the number to move before anything is signed, but the direction is unmistakable.
The fine print
Three things sit underneath the $40 billion.
First, the pharma deals are real but the money is conditional. Eli Lilly put up $45 million upfront with up to $1.7 billion in milestones. Novartis offered $37.5 million upfront and up to $1.2 billion. Together, nearly $3 billion in potential payouts. Milestone payments only land when a candidate clears specific development stages, and most candidates never do. What the deals actually prove is narrower: Lilly and Novartis, companies that employ thousands of their own chemists, paid real money to aim Isomorphic's models at their targets.
Second, the timeline already slipped. Hassabis once targeted AI-designed compounds in trials by the end of 2025. The current plan is the end of 2026. Drug discovery has a well-documented failure rate even after a promising compound reaches the bench, so every slip matters to the math behind a $40 billion price.
Third, the pitch rests on AlphaFold, which has unusually strong scientific credibility for a drug discovery tool. Hassabis and John Jumper won the 2024 Nobel Prize in Chemistry for it, and Alphabet's backing buys computing and capital runway few biotech startups ever get. None of that is in dispute. What is new is the pattern: AI-adjacent companies are being priced on narrative momentum, and biotech just joined the list. A clinical-stage biotech with no approved drug and no Phase 3 data normally trades at a steep discount to one with trial results behind it. Isomorphic is asking investors to skip the discount entirely, on the strength of a Nobel-winning platform and a famous founder.
Where AI capital goes next
If the round closes anywhere near $40 billion, it lands well above most publicly traded clinical-stage biotechs, companies that at least have trial data investors can evaluate. The deal is not closed and the structure is not set. But the signal is already readable: now that the infrastructure boom around large language models has priced in the obvious bets, AI capital is moving into domains where models have to earn trust the hard way, one trial at a time. The question was never whether AI can design a molecule. It is whether designing molecules was ever the expensive part.
Sources
- [1] Startup Fortune, "Isomorphic Labs seeks funding at a valuation of at least $40 billion" (Oct 8, 2026), citing BloombergRead source