Photo by Mohamed Nohassi on Unsplash

An Introduction

Given that the drug development process is so expensive (about $900 million) and time-consuming (13.5 years, on average), firms cannot afford to push that many drugs forward which creates a huge shortage in drug candidates and programs. That being said, the advent of AI can significantly shorten and cheapen this process.

It takes such a long time to find new drugs because the universe of biological data is enormous and it takes scientists great effort to sort through all the data, uncover the root causes of diseases, and formulate compounds to fight those diseases but AI can automate that entire process. Researchers can use AI to find new drug candidates much faster than is currently possible and this is already happening.

AI-powered Drug Discovery Growth Projections

• According to Grand View Research the global "AI in drug discovery" market was worth about $1.1 billion last year but should grow at a 30% clip from 2023 to 2030.
• Research firm Deep Pharma Intelligence estimates that investments in the field of AI-powered drug discovery have tripled over the past four years to nearly $25 billion (see chart below) and
• Morgan Stanley believes this tech will lead to an additional 50 novel therapies being brought to market over the next decade, with annual sales in excess of $50 billion!

(Click on image to enlarge)

A $50 billion AI drug discovery revolution is underway and to keep abreast of developments munKNEE.com has put together a portfolio that tracks the progress of 6 small cap ($100M to $2.5B) clinical stage companies focused on the use of AI to discover new drugs. They are listed below in alphabetical order with market capitalizations, a description of each, and links to the most recent news on each where present.

The munKNEE AI-focused Drug Discovery Stocks Portfolio

1. AbCellera Biologics (ABCL):
   • Company Description:
     • ABCL develops antibody therapeutics using AI focusing on searching and analyzing the immune systems to find potential antibodies, then outsourcing their initial findings to their partners for further drug discovery.
   • Market Capitalization: $1.1B
   • Latest News: AbCellera Reports Q1 2024 Business Results
2. Absci Corporation (ABSI):
   • Company Description:
     • is focused on antibody design, creating new from scratch antibodies (“de novo antibodies”), and testing them in laboratories in a 6-week process.
   • Market Capitalization: $522M
   • News: Absci Reports Business Updates and First Quarter 2024 Financial and Operating Results
3. Exscientia (EXAI):
   • Company Description:
     • EXAI reported the first AI-designed drug candidate to enter clinical trials and has expanded its AI-based platform to develop novel therapeutic antibodies through generative AI design.
     • Exscientia is collaborating with Bristol-Myers Squibb on a handful of drug candidates and has partnered with Sanofi, GSK and PathAI on drug discovery projects.
   • Market Capitalization: $657M
   • News: Exscientia to Report First Quarter 2024 Financial Results on May 21, 2024
4. Recursion Pharmaceuticals (RXRX):
   • Company Description:
     • RXRX specializes in drug discovery through machine learning using its proprietary Recursion Operating System and has one of the world’s most extensive biological and chemical datasets.
     • It has several compounds in phase 1 and 2 studies, including a small molecule therapeutic for cavernous cerebral malformation and another for neurofibromatosis type 2.
     • Recursion claims to conduct millions of experiments per week using supercomputers, machine learning and automated robotic labs.
   • Market Capitalization: $2.2B
   • News:
     • Recursion Announces Completion of NVIDIA-Powered BioHive-2, the Largest Supercomputer in Pharmaceutical Industry

     • Recursion Provides Business Updates and Reports First Quarter 2024 Financial Results

5. Relay Therapeutics (RLAY):
   • Company Description:
     • RLAY specializes in developing an artificial intelligence-driven allosteric drug-discovery platform intended to detects and characterizes interactions that occur on a protein of interest and combines computational methods with experimental approaches across the fields of structural biology, biophysics, and chemistry. Its initial focus on precision oncology and genetic diseases.
   • Market Capitalization: $881M
   •  News: Relay Therapeutics Reports First Quarter 2024 Financial Results and Corporate Highlights
6. Schrödinger (SDGR):
   • Company Description:
     • SDGR offers specialized solutions for both small molecule discovery and biologics discovery focusing on structure prediction and protein engineering, including antibody modeling.
   • Market Capitalization: $1.7B
   •  News: Schrödinger Reports First Quarter 2024 Financial Results

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