Sanofi's venture arm is going against a pharma bear market by upping investments and hiking its fund to $1.4bn. Unit head Jason Hafler says AI opportunities are a big reason why.
Pharmaceutical firm Sanofi’s strategic investment arm, Sanofi Ventures, is making a significant push into artificial intelligence after increasing the size of its fund to $1.4bn, according to managing director Jason P. Hafler.
“We’re really focused on how we can support Sanofi as being one of the leading AI-driven drug discovery companies,” he says.
The drug producer added $625m to Sanofi Ventures’ coffers last month, hiking its capital under management to $1.4bn, the increase coming at a time when the unit is leaning into AI. Sanofi is one of a number of pharmaceuticals companies backing startups that are using AI in the drug discovery process, but in addition to this it is also targeting AI technology developers.
Earlier this month, Sanofi Ventures invested an undisclosed sum in QuantHealth, the creator of an AI-equipped software platform that can simulate advanced clinical trials to predict how individual patients will respond to specific medicines. One of the unit’s partners, Cris De Luca, is an AI specialist who led Johnson & Johnson’s digital health incubator before he came onboard.
That strategic focus is linked to Sanofi itself, which now officially bills itself as an “R&D driven, AI-powered biopharma company”. It is now actively using generative AI to streamline tasks while also applying machine learning and trained algorithms to drug discovery, the latter fueled by a partnership it formed with OpenAI and AI startup Formation Bio last year, shortly before it took part in Formation’s $372m series D round.
None of the AI drug discovery startups in Sanofi’s portfolio have yet got an AI-discovered drug to market yet, but Hafler says that’s normal. Though AI can compress the time for discovering a molecule, the various phases of clinical testing, from animal to human trials, is still lengthy.
“What happens in drug development can take a decade, and so we’re just at the early stages of seeing how AI is going to impact this”
“Those time horizons aren’t going to be impacted,” he adds. “What happens in drug development can take a decade, and so we’re just at the early stages of seeing how AI is going to impact this.”
In addition to using AI to discover molecules that could form the basis for new drugs, Sanofi Ventures is assessing AI tools that can manage certain parts of the clinical development process, such as the selection of patients for clinical trials. The QuantHealth deal was aimed at supporting that push.
“We do think there are incredible ways in which AI is going to impact medicine and patients, and so we’re looking at it, monitoring it and we’re thinking about things like clinical trial design, about running digital twins,” Hafler says. “We look at it across the spectrum, and I think drug discovery is one piece of that which is still in the early days.”
Scientific advances (and some hefty exits) push increased deal rates
The recent cash influx comes amidst a period of increased activity for the investment team. Sanofi Ventures is set to record its busiest investment year yet and has emerged as one of the industry’s most active CVC investors at a time when several peers have quietly slowed down. Hafler says the team has been keen to capitalise on recent scientific advances.
“We felt now is a moment in time to continue to support the innovation ecosystem, when we see great science and huge unmet needs for patients,” Hafler says.
“There’s no difference in the strategy other than doing more, because we think there is a great opportunity with great science and great entrepreneurs.”
“We have a very patient-focused effort where we want to focus on, not incremental unmet needs, but true unmet needs for patients,” he adds. “With the increased deal flow which we’ve seen [recently], we actually think there’s no difference in the strategy other than doing more, because we think there is a great opportunity with great science and great entrepreneurs.”
Hafler says Sanofi Ventures’ deals are weighted roughly 80% towards pharmaceuticals and 20% digital health, with the former still influenced by traditional Sanofi areas such as immunology or rare neurovaccines.
“We’re looking at white spaces, where we want to focus on things we maybe don’t have as large a footprint in yet, but we’re focused on for the future,” he says. Those have led to investments in neuropsychiatric drugs (Draig Therapeutics), ophthalmology (SpliceBio) and pain management (Latigo) this year.
“Those are areas in which we think equity in venture is a great tool to be able to stay close and monitor what we think could be the next wave and generation of important medicines for patient,” Hafler adds.
The other side is the exits. Three Sanofi Ventures portfolio companies were acquired last year for a combined $3.25bn, capped by AbbVie’s $1.4bn purchase of Alzheimer’s disease drug developer Aliada in December. Those have continued in 2025, with Datavant buying real-world medical evidence provider Aetion in July.
The other sizeable exit has been virtual healthcare provider Omada Health, which floated the previous month, and which reached a new peak share price this week. But Omada is the first IPO exit for the unit in quite a while, and although the market is recovering, M&A is set to remain the main exit path for now.
“Especially now – the cost of equity capital is so high, I think you have to look at M&A or partnerships and non-dilutive methods as one of the strategies in which we can progress science,” he says.
“I think this is where you start to see, as interest rates go up and the cost of capital increases, we often see a shift towards M&A, which is what the data has shown this year. But these things ebb and flow.”
