A startup with expertise in artificial intelligence, pharmaceuticals and the legal system has raised venture capital to identify drugs that could be the basis for product-liability lawsuits.
Justpoint, which calls itself a consumer-protection company, has raised $45 million in Series A financing, plus a $50 million line of credit, to build a business that uses artificial intelligence and scientists to scour medical records to find drugs, chemicals and consumer products that it believes have harmed patients or consumers.
The Boulder, Colo.-based company then plans to provide that information to customer Justpoint PLLC, an independent, Arizona-based law firm that licenses Justpoint’s technology, name, website and services. Justpoint PLLC could then sue the makers of these products, with Justpoint Inc. keeping a portion of the gains from successful cases.
Justpoint Inc. has identified initial drugs it believes to be causing harm and has supplied that information to Justpoint PLLC, which intends to file lawsuits, Justpoint Inc. co-founder and Chief Executive Victor Bornstein said. Justpoint Inc. intends to disclose those medications in the coming months, he said.
The model raises questions about the potential for increased litigation to drive healthcare costs upward. Justpoint investors said the medical system bears the cost of treating patients who have been exposed to harmful drugs and chemicals and that the startup can improve outcomes by spotting dangerous substances sooner.
Justpoint enables patients to be proactive rather than reactive, said Mike Silva, a general partner with Justpoint investor Across Capital Partners. “With early detection comes better health outcomes and lower costs for the system overall,” he added.
Justpoint is one of several startups raising venture capital recently to apply AI to the legal sector. Fear of long sales cycles in a legal market resistant to change once deterred investors, said Zach Posner, co-founder and managing partner of the LegalTech Fund, which invests in software for the legal sector and adjacent markets, but isn’t a Justpoint backer.
That changed with the introduction of generative AI, which awakened venture firms, entrepreneurs and lawyers to the technology’s potential to improve efficiency, Posner said. A 2023 Goldman Sachs report, for example, said generative AI could automate 44% of legal tasks in the U.S.
Now, more investors and entrepreneurs are entering the legal sector, Posner said. “I think we’re just getting started with technology in this vertical,” he added.
Several legal-tech startups serve the medical sector. LegalTech-backed Pattern Data, for instance, sells AI software to help law firms scan medical records to prepare for mass torts—in which a group of plaintiffs allege one or more harms from the same defendant—to quickly retrieve data relevant to their cases.
Charlotte, N.C.-based Pattern Data serves plaintiff and defense law firms and settlement programs—which determine which plaintiffs are eligible for settlement payments, and in what amounts—with a goal of accelerating and improving the transparency of legal processes, said co-founder and CEO Matt Francis.
“We’re adding value to this whole litigation system more broadly, versus picking a side,” Francis said. “There’s really substantial claims that have a lot of merit and there are meritless claims. If we can help everybody understand those better and more efficiently, then we’ve done our job.”
Seattle-based Supio, which raised a $25 million Series A financing in August, uses large language models to convert unstructured data to structured data in medical records so personal-injury and mass-tort lawyers can contextualize the information and build stronger cases, said co-founder and CEO Jerry Zhou.
The software can, for example, help lawyers discern relationships between medical bills and the event being billed for so they can spot missing documentation, said Zhou, adding that Supio has about 80 law firms using its technology.
One customer, TorHoerman Law, a personal-injury law firm, used Supio’s software in a case against Abbott Laboratories in which a jury ordered Abbott to pay $495 million for failing to warn that its baby formula for premature infants increased the risk for a bowel disease, a case that involved some 43,000 pages of medical records. Abbott is appealing the decision.
“It’s not going to tell you exactly where the needle is in the haystack, but it’s going to tell you where you should be looking,” said Tyler Schneider, an attorney and managing partner of TorHoerman Law.
Justpoint’s Bornstein grew up in Brazil and came to the U.S. at age 25 to get a Ph.D. in biomedical sciences from the Icahn School of Medicine at Mount Sinai in New York, with a goal of pursuing a cure for multiple sclerosis.
But biotechnology research takes years to pay off, and he said he was also interested in identifying medical products that cause more harm than good. He launched Justpoint in 2018 with co-founder Oleksandr “Sashko” Zakharchuk, the startup’s president and chief technology officer.
Through its partnership with Justpoint PLLC and other law firms, Justpoint Inc. has access to millions of patient medical records, Bornstein said. In its epidemiology lab, physicians, epidemiologists and technologists use AI to analyze billions of data points to find harm caused by drugs that hasn’t been revealed before, Bornstein said.
“Our approach is more proactive,” he added.
Startups usually generate investor returns by going public or being acquired. Justpoint has additional options, said Wayne Hu, a partner with SignalFire, which led the venture financing. The company, he said, could distribute fees from successful cases through dividends to shareholders, or stockholders could sell shares to secondary buyers who seek access to that revenue stream, he said.
“One of the interesting things about this business model is there are extra potential opportunities for liquidity,” he added.
Original link: https://www.wsj.com/articles/this-startup-wants-to-use-ai-to-uncover-dangerous-drugs-40297123