Yosemite targets $350m for AI oncology ventures as pharma patent cliff looms

Reed Jobs has closed the first tranche of a $350 million fund for Yosemite, the oncology-focused venture firm he founded in 2023. The firm now employs 17 people and manages a portfolio of 20 companies, blending commercial investment with early-stage academic research.

Yosemite deploys capital differently than traditional life science funds. Roughly a third of the new fund will finance companies the firm builds from scratch alongside academics at institutions like Yale, Berkeley and Stanford. The remaining two-thirds backs existing startups.

For European investors tracking transatlantic capital flows, the fund's launch underscores a broader market shift. After a post-pandemic slump, the biotech sector is rebounding as major pharmaceutical companies approach the largest patent cliff in history. Sitting on record cash reserves, big pharma has launched an acquisitive spree, highlighted by Eli Lilly’s $7 billion acquisition of Kelonia.

Jobs pointed to artificial intelligence as the primary catalyst accelerating Yosemite’s pipeline. In drug discovery, AI has expanded the druggable genome beyond the historical 15% limit by identifying previously hidden protein pockets. This includes finding new variants of KRAS, a gene long considered impossible to target.

The technology is also reshaping clinical trials, which represent the largest cost and time sink in drug development. A Phase 3 cancer trial costs about $260 million, with just a one-in-three success rate. Jobs noted that AI-generated synthetic control arms could halve patient recruitment requirements, a shift the US Food and Drug Administration is actively encouraging.

Yosemite’s portfolio reflects this high-risk approach. Azalea, born from a grant to Jennifer Doudna’s lab, is already in the clinic, while Quarry pursues induced proximity to drag disease-causing proteins into a cell’s breakdown system. The firm is also deploying three separate companies to target p53, a mutated tumor suppressor gene present in nearly all human cancers that has never been successfully drugged.

To de-risk early academic research, Yosemite allocates 2.5% of its assets to a donor-advised fund for no-strings-attached grants, supplemented by $1 million annually from management fees. This philanthropic layer aims to insulate early-stage science from political pressures, as US lawmakers have recently proposed deep cuts to the National Institutes of Health.