Finding drugs from fungi has been a mix of serendipity and scientific discovery that, over the years, led to medicines like penicillin, the first statin and the immunosuppressant cyclosporine. However, despite those notable successes, drugmakers haven’t been able to reliably repeat them.

An emerging group of biotechs aims to make the task easier and a new alliance involving one of them, LifeMine Therapeutics, suggests larger drugmakers are intrigued by their progress.

LifeMine, a startup led by serial biotech entrepreneur and former Harvard University chemical biologist Greg Verdine, has partnered with GlaxoSmithKline to discover and develop drugs from fungal genomes. LifeMine will get $70 million from GSK through the deal, a sum that includes an equity investment in a $175 million funding round that has just closed.

The partners plan to find drugs directed at three targets selected by GSK. They’ll split the costs of the early discovery work, after which GSK will cover development and, should that prove successful, commercialization of any drugs that emerge. LifeMine could earn additional payments if certain milestones are achieved.

The companies described their collaboration as the first drug discovery alliance between a pharmaceutical company and a startup studying fungal genomes, a point of progress for an emerging research approach.

Two of largest biotechs doing this work, LifeMine and Hexagon Bio, have raised hundreds of millions of dollars in funding. LifeMine has brought in $295 million since Verdine co-founded it with business colleague Weiqing Zhou and former National Cancer Institute director Rick Klausner in 2017. Hexagon, co-founded that same year by University of California, Los Angeles chemist Yi Tang has raised $108 million. (Other startups like Intact Genomics and Terra BioWorks are involved in similar research.)

“We’re excited by it,” Verdine said, of the growing number of companies. “This is a huge space. There’s plenty of room for more than one player.”

The interest in the companies’ work reflects the potential in mining fungi for new drugs. While a range of existing medicines are derived from fungi, pharmaceutical companies have had difficulty repeating those discoveries in a systematic way. The function and utility of the substances fungi produce are not always clear, and picking out which ones may lead to new medicines is harder still.

Biotech startups have begun to take up the challenge, aided by cheaper DNA sequencing as well as cutting-edge computing and synthetic biology tools. Both Hexagon and LifeMine are mapping the genomes of thousands of species of fungi, amassing large databases of genomic information in the process. They aim to identify gene clusters within fungi, predict the type and function of molecules they encode and use that information to pick out promising drug prospects.

“We compare it to an expedition,” Verdine said. “Every single piece of it has turned out to be really rather challenging.”

LifeMine and Hexagon remain in the early stages of their work and are not yet in human clinical trials. (LifeMine envisions seeking regulatory clearance to begin its first studies — likely in cancer or immunology — by the end of 2023, Verdine said.)

Yet they are backed by so-called crossover investors that often support initial public offerings, likely meaning each is already considering a stock offering. That type of support would’ve been sufficient to propel LifeMine into the public markets only a year ago. But the pace of biotech IPOs has slowed amid a broader market downturn, making the path to Wall Street harder for drug companies like LifeMine.

Instead, some startups are choosing to wait things out privately, and Verdine says that strategy matches how he and LifeMine’s investors intend to build the company.

Verdine has formed 10 biotechs over the course of his career and six have gone public, with mixed results. Enanta Pharmaceuticals thrived as a public company, while Eleven Biotherapeutics and Tokai Pharmaceuticals merged with other companies after clinical setbacks. Wave Life Sciences, another Verdine company, has lost much of its value over the past couple of years.

As a result of those experiences, Verdine hopes to avoid rushing the two companies he’s now running — LifeMine and another early-stage biotech, FogPharma — to an IPO before they’re ready.

“There have been times that my own companies really would have been better served by staying private longer,” he said, adding that his preference has been to build a company large enough to “weather the ups and downs of the market.”

Verdine said he recruited board members and investors willing to support LifeMine’s “twists and turns” privately. Those investors stuck with LifeMine for its latest round, giving it enough cash for more than two years — time it can use to build a pipeline of drug candidates.

At that point, Verdine said, “we’d deserve to be a public company.”