Good day. Silicon Valley Bank’s turmoil affects startups across industries. The stakes are especially high in one where companies develop drugs, devices and other products that affect people’s health.

“You have innovative companies that are working on treatments and products that impact patients on a daily basis,” said Michael Monovoukas, co-founder and chief executive of startup AcuityMD Inc., which provides software to medical-technology companies.

AcuityMD last year pulled 90% of its deposits from SVB so it could earn a higher return on its money with another financial partner, Morgan Stanley, Mr. Monovoukas said. It kept 10% of its cash with SVB to process payroll and for other business purposes, he said.

As SVB was capsizing, the company quickly rewired its payroll to draw from the Morgan Stanley account, he said. AcuityMD met payroll, but SVB’s troubles hurt startups that are striving to establish themselves, he added. Newly formed Silicon Valley Bridge Bank now holds deposits and substantially all the assets of SVB.

“As a startup, it’s this constant struggle of building and reaffirming your legitimacy,” he said. 

SVB won over entrepreneurs with financial products tailored to startups’ needs, said Michelle Longmire, co-founder and CEO of clinical trials-technology startup Medable Inc.

“Because Silicon Valley Bank was such a cornerstone of the ecosystem, this pulled the rug out from under people,” said Allan Shaw, chief financial officer of biotech company Portage Biotech Inc.

One concern is that the banking crisis will squeeze a venture financing market that has already contracted. Resourceful companies will still find ways to innovate, some observers said.

“Great innovation comes from these times when we’ve got to be creative and efficient,” said Errik Anderson, founder and CEO of startup Alloy Therapeutics Inc.

And now on to the news...

Protein prediction. Meta Platforms Inc.’s new tool predicting the structure of hundreds of millions of proteins is the latest example of a breakthrough in computational biology that began several years ago at an Alphabet Inc. subsidiary. Some scientists expect the new class of artificial-intelligence systems to accelerate work in the life sciences, particularly drug development, The Wall Street Journal reports.

• DeepMind Technologies, the subsidiary of Google parent Alphabet, first solved a problem that had been vexing scientists for 50 years using artificial-intelligence as an alternative to much slower and more expensive laboratory techniques for determining the three-dimensional structure of proteins. Those structures are crucial to drug and vaccine development, climate change research and more.
   
• DeepMind said in July that its AlphaFold2 AI system, first released in July 2021, had been used to predict the structure of nearly all proteins known to science. Meta said on March 16 that its ESMFold system had been used to reveal the structures of an even larger group of proteins, including the least understood ones: those found in microbes in the soil, deep in the ocean, and some inside human bodies.
   
• Facebook-parent Meta’s ESMFold employs a large language model that can predict text from a few letters or words, based on the same technology underlying OpenAI’s ChatGPT. DeepMind devised a different approach employing a pair of neural networks. Meta said its approach is 60 times faster than DeepMind’s, but is less accurate.

The latest advances in artificial intelligence extend beyond tools that write text, create illustrations and code software, WSJ reports. There’s another facet of the new AI revolution, a marriage of deep learning and biology, that’s at least as important, but far less widely understood.

The Biden administration on Wednesday announced initiatives aimed at transforming the U.S. organ-procurement system, adding more competition to improve transparency and accountability. The Health Resources and Services Administration said it would solicit multiple contracts for managing and improving the Organ Procurement and Transplantation Network, which was established by Congress in 1984 and manages the nation’s organ-transplant system under contract with the federal government.

People

BEKHealth, a patient-matching software platform serving the clinical trial industry, said David Levin joined the company as president and chief executive. He was formerly chief marketing officer at Crucial Data Solutions.

Drug development startup Generate Biomedicines appointed Beth Grous as chief people officer. She was previously senior vice president and chief people officer at Tripadvisor.

Remix Therapeutics, a developer of novel small molecule therapies, named Robert Gagnon to the post of chief financial officer. He was previously CFO and operating partner at Gurnet Point Capital.

Gravie, a Minneapolis-based employer-sponsored health benefits provider, said General Atlantic led a $179 million growth investment in the company. Additional investors including AXA Venture Partners also contributed to the new funding.

Flare Therapeutics Inc., a Cambridge, Mass.-based precision oncology-focused startup, secured $123 million in Series B financing co-led by GordonMD Global Investments and Pfizer Ventures. Craig D. Gordon of GordonMD and Irena Melnikova of Pfizer Ventures joined Flare’s board.

EpiBiologics, a San Mateo, Calif.-based startup building an antibody-based protein degradation platform for membrane and extracellular drug targets, launched with $50 million in Series A funding from investors including Mubadala Capital.

Mindset Health, an Australia-based digital hypnotherapy startup, raised $12 million in Series A funding led by King River Capital.

Reveal HealthTech, which offers specialized engineering services to healthcare companies, was seeded with a $4 million investment from W Health Ventures.

Previse, a Baltimore-based startup focused on the early detection and prevention of cancer, raised $3 million in seed funding from investors including Tedco and Riptide Ventures. The company, which was previously known as Capsulomics Inc., also launched its esophageal cancer prognostic test.

• Coffee and your heart. The impact may be different than you think.
   
• Eli Lilly is priced for perfection in the obesity market
   
• Generative AI makes headway in healthcare
   
• Deadly fungus spreading across the U.S., mostly in healthcare facilities
   
• FDA may authorize additional Covid-19 booster shots
   
• China approves first homegrown mRNA Covid-19 vaccine

• The Oscar for making payroll goes to… (Life Sci VC)
   
• The lesson biotech shouldn’t take from Silicon Valley Bank’s failure (STAT)
   
• The venture crew at Mubadala are upping their biotech-creation game (Endpoints News)
   
• Biden plan to cut billions in Medicare fraud ignites lobbying frenzy (New York Times)
   
• At Senate hearing, Bernie Sanders grills Moderna CEO for quadrupling Covid vaccine price (Boston Globe)

This newsletter was compiled by Matthew Strozier, Zachary Cole and Brian Gormley.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley, Angus Loten, and Marc Vartabedian.

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