©Ammino observation-Original production by digital medical group
Author | zhang xi
On August 8, Recursion announced a deal with Exscientia for $688 million. The two companies are AI pharmaceutical veterans founded in 2013 and 12012 respectively. This is the biggest acquisition in the AI pharmaceutical industry, indicating that the AI pharmaceutical industry continues to precipitate.
Throughout the development and business model of Exscientia, from target discovery to the development of its own pipeline in drug clinic, the original AI pharmaceutical company is destined to face longer fronts, higher costs and risks; at the same time, Exscientia only raised more than $100 million in the eight years before round D, which seems to have missed the best growth opportunity. It finally lay flat on the beach after the earliest pipelines were closed and stalled, and the existing pipelines were handed over to Recursion.
It looks like the Recursion could be the big winner.
The merged new company is expected to have 10 clinical data readouts in the next 18 months. If one of the clinical data exceeded expectations, it could be a "singularity" moment for AI pharmaceuticals. And the existing partnership will give the new company a milestone of about $200 million in payments over the next two years and a share of more than $20 billion in potential sales during the partnership period. As a result, the market is cautiously optimistic about the merger deal.
Pharmaceuticals are the long-term bets. According to the clinical success rate of "ten into one" in the industry, the first AI drug molecule that can be successfully marketed may have already entered the clinic, and it is only a matter of time.
Sadly, the first veteran Exscientia walked down the card table in the darkness before dawn.
01、Expectations did not collapse
Everyone is waiting for the "singularity" of the successful AI drug market, but this is not the only test for the success of AI drugs.
Innovative medicine, in the trend of inverse Moore's Law, it's only going to get harder. Under this trend, pharmaceutical companies have more simple expectations for AI: innovation, efficiency, and cost reduction.
In fact, the ability of AI technology platforms to create innovative molecules has long been proven. A recent study published in Drug Discovery Today by the Boston Consulting Group (BCG) shows that AI molecules have demonstrated clinical success rates beyond the industry average:
In phase I clinical trials, the success rate was 80% to 90%, while in the past, the success rate was only 50%. AI showed a strong ability in designing or identifying molecules with drug properties. BCG predicts that the overall success rate of new drugs will increase from the current 5-10% to 9-18%.
AI pharmaceutical in the development efficiency improvement, the naked eye. According to the BCG report, the pharmaceutical industry can enable the AI to shorten the research and development cycle by about 50%, in other words, double the research and development efficiency.
Similarly, McKinsey said in a report released in January that generative AI can generate $15 to $28 billion in economic value in the early stages of drug discovery, and the core logic is to significantly improve efficiency, including not limited to:
The design speed of macromolecules is increased by more than three times;
The performance of the chemical compound activity model is improved by 2.5 times at most;
The time required to identify new clues has increased more than four times (from months to weeks).
As a result, the number of molecules found using AI has increased exponentially over the past decade, with a compound annual growth rate of more than 60%. This shows that pharmaceutical companies are really paying for AI, delivering AI molecules to expensive clinical trials, and constantly verifying them step by step through regulatory approval and clinical data.
In fact, the chill remains, but the market's expectations for AI pharmaceuticals have not collapsed.
From Nvidia's investment in more than 10 AI pharmaceutical companies since last year to Xair's $1 billion seed round at the start of the year, it seems that the industry still believes that AI pharmaceuticals have huge opportunities.
The capital market is no exception. Jingtai Technology, an AI + robot drug and new materials research and development platform, was successfully listed as the first 18C stock of the Hong Kong Stock Exchange, and its stock price rose against the trend and was recently included in the Hang Seng Index (effective on September 9), which also demonstrated the market's expectations for Jingtai Technology.
Of course, as a whole, the market is now more cautious and rational in the assessment of enterprises. With the rapid development of AI technology in the field and the continuous integration with biotechnology, AI pharmaceutical survithe fittest in the fever, the starting point of the platform is also improving, and the technology and business model continue to evolve.
AI + Biotech technology continues to be upgraded and integrated. For now, while there are still many variables to win, a good gun can certainly improve target shooting.
At the same time, the rising stars in the domestic biotech field are also rapidly emerging. With newer technology and more ambitious pipeline, they get the milestone data earlier than their predecessors, accelerating the pace of development in the industry's doubts about AI technology.
China's AI-enabled innovative drugs started later, but the tip of the iceberg has surfaced. As time continues, the AI-enabled pipelines will also be increasingly disclosed.
02、Let the "light" continue to fly
The fate of the first generation of AI pharmaceutical companies represented by Exscientia and some failed pipelines will not affect the industry's consensus on the future prospects of AI pharmaceutical technology. The core logic is that there is a "lag" in our observation and cognition of AI pharmaceuticals.
If we compare the drug pipeline to stars, we are only observing a few light years away of the first dust, which may have spawned a new generation of stars, and their light is still flying on the road, and it will take time to make earth observations. Only based on the earliest pipeline results, the conclusion of AI pharmaceutical, is not comprehensive.
The BCG study found that 75 drug molecules discovered by AI have been put into clinical trials since 2015,67 of which are still in clinical trials as of 2023, meaning that only a small portion of the answer was revealed.
In traditional drug development, only one out of every 10 molecules in the clinical pipeline can be successfully marketed. Even at that ratio, the first AI drug molecule to be successfully marketed has entered the clinic. What's more, AI technology is expected to significantly improve the success rate of drug development.
In fact, we have been able to see that more and more innovative pharmaceutical companies are enabling AI technology platforms to continue to make progress beyond expectations.
Since its listing on the Hong Kong Stock Exchange, five AI biotechnology companies, from Lemon Biotech, MerBiotech Co., Ltd., and Xili Technology, with research and development cooperation, have disclosed the milestone progress of the pipeline, or successfully obtained high financing to promote the pipeline in clinical practice.
Among them, The fastest progressing company just completed the C round financing of $100 million in June, with a total financing of nearly $300 million in total. The first small molecule phase III clinical process is under way, and the mRNA pipeline will also enter the clinic this year. Higg and Merda announced in June and July respectively that the pipeline received the FDA IND approval and the qualification for pediatric rare diseases, and are about to enter the clinical stage. With IIT clinical data, it won RMB 50 million angel round supplementary financing. It is undergoing IND declared metabolic enhanced CD19 CAR-T cell therapy (Meta10-19), which successfully brought more than 20 patients with solid tumors and hematology tumors to complete remission (CR) at a very low dose of 1% -5% and discharged them. The four companies were established in 2020-21.
For the biotechnology company only established about 3 years ago, these achievements are absolutely brilliant achievements, but also a strong verification of Jingtai Technology as an AI pharmaceutical platform.
The combination of AI + Biotech, the future is increasingly clear. Not proprietary pipeline crystal tai technology, continue to clinical drug molecular drugs, repeatedly confirmed that platform output innovation skeleton, rational design drug candidate strength —— not only with Pfizer, the top 20 pharmaceutical companies 16 research and development orders, also challenge new target with innovative enterprises, realize clinical transformation, hand over good results. Big drug companies have higher delivery requirements, and early-stage biotech companies have higher opportunity costs for trial and error. As a research and development platform enterprise spanning multiple disease fields and drug models, it means that the technology and platform of Jingtai Technology need to go through more stringent tests.
In the future, the birth of potential molecules involved by AI is likely to be faster and faster.
Drug research and development of biological challenges and engineering challenges constitute a two-dimensional coordinate system, in the coordinate system, the core ability of crystal technology more reflected in the engineering direction, in the drug development molecular design and activity optimization, chemical synthesis, if can the innovation ability and synthetic path design into engineering problems, you can try to find certainty in the uncertainty.
In terms of positioning, Jingtai Technology starts with the research and development platform of quantum physics, AI and robots, and helps enterprises solve the problem of "tools" when "if you want to do a good job, you must first be good". Pharmaceutical clients undertake biological and medical challenges, selecting targets, setting research and development goals, and subsequent development, clinical, and marketing strategies.
For AI pharmaceutical companies, the future competition largely depends on who gets high-quality, structured data at lower cost and higher throughput.
The advantage of extensive cooperation is that the platform of AI + robots with mutual verification and mutual knowledge is growing: constantly feeding the algorithm with high-precision, structured and real-world positive and negative sample data. A large amount of standardized data generated by the automation laboratory is continuously fed back to the intelligent model to realize the "small steps" iteration of research and development, solve the data shortcomings of AI drug research and development, and finally translate into the platform molecular innovation, the efficiency and delivery capability of chemical synthesis.
In other words, Jingtai Technology's solution to the "anti-Moore law" of pharmaceutical research and development is to form positive feedback through the verification loop of AI and robots:
"The more r & d partners- -the better the technology, the lower the marginal cost- -the more R & D partners."
03、return more than expected or cash in advance
As more and more AI molecules enter the clinical development link, the realization of industry expectations may come ahead of schedule.
As mentioned above, the listing of AI molecules is an inevitable result, but it is not necessary for an enterprise to market AI molecules, just as the establishment of AI pharmaceutical model. After getting the new AI molecule, whether the enterprise chooses to continue to promote the pipeline clinical itself or conduct acquisition or authorization transactions with large pharmaceutical companies, it can obtain the corresponding or even rich enough returns.
As long as it presents potential data in the clinic, it is likely to win the favor of big pharmaceutical companies. The later the stage, the higher the return of pharmaceutical companies will get. At the end of 2022, Nimbus, owned by Schroedinger of AI Pharmaceutical Saas platform, sold NDI-034858, which is still in clinical phase 2, to Takeda for a transaction of $6 billion and a down payment of $4 billion.
Even the more early clinical molecules are of considerable value. For example, at the end of 2022, Colenberg and Merck reached a cooperation of 10 billion dollars on seven preclinical ADC molecules, of which only the down payment was 175 million dollars, and the average value of a single molecule was close to 180 million yuan.
For another example, Merck recently bought all the interests of Tonggrun Biological CD3xCD19 CN201 pipeline for $1.3 billion, of which the down payment is as high as $700 million, a down payment is equal to an IPO. Considering that CN201 is in clinical Ib, there are uncertainties and risks, such returns are rich enough.
The story still continues.
As mentioned above, Jingtai Technology has achieved a series of milestone nodes such as Limang Biology, Merda Biology, Xili Technology, in fact, means that Jingtai Technology is getting closer to the harvest node, and the return may exceed the market expectations.
Careful study is not difficult to find that these enterprises in many new targets in the field, new mechanisms of serious illness, have been stuck.
Merda biology is expected to become a supernova in the field of self-exemption. As the second largest treatment field in the world after cancer, represented by Humira, which has been the "drug king" for 11 consecutive years, the popularity of the self-free market remains high. Merda Biology focuses on the research and development of the new generation of immune metabolism mechanism. With the support of Jingtai Technology, it has fully invested in the research and development of the self-free FIC pipeline. Among the three pipeline projects, the first phase I clinical project is scheduled to be launched in Australia in the first half of 2025. Its Rheos Medicine and Sitryx have established research cooperation agreements worth $800 million and $900 million, respectively. After the patent cliff, a number of emerging immunometabolic therapies are accelerating to the clinic, hoping to become the next blockbuster in the self-free market.
Higg's first new drug, sigx1094, is the first diffuse gastric cancer (DGC) targeted drug to receive IND, corresponding to a market of about $2 billion. Sigx1094 Through the activity assessment of Higg organoid model, it is expected to fill the global treatment gap of diffuse gastric cancer. Effective therapies for gastric cancer are scarce, so the market expectations for breakthrough drugs are always high, and for Zanidatamab, which covers less than 20% of gastric cancer patients, the market has given a peak sales forecast of over $2 billion.
While sigx1094 targets DGC with a higher proportion of patients (30% of all gastric cancer cases) and a worse prognosis (five-year survival rate less than 10%), which should have a better market performance. In addition, sigx1094 has shown preclinical potential for treating malignant tumors such as ovarian cancer, triple-negative breast cancer and pancreatic cancer.
The Lemon creatures could be the next legend. There are 5 CAR-T products approved in China, with the price ranging between 99 0,000 yuan and 1.29 million yuan. The very low dose of CAR-T achieved better efficacy at 1% of the dose of conventional therapy, and the production cost and cycle had obvious advantages, with the opportunity to overtake, bringing the CAR-T price into the range of medical insurance, and solving the "sky-high price" challenge of CAR-T therapy. At the same time, very low doses make the side effects low enough to expand more indications. At present, the only CAR-T therapy available for childhood leukemia is Novartis Kymriah, not in China. However, the first pediatric blood malignancy patient of Lemon biological metabolism-enhanced CAR-T has been in complete remission and discharged after treatment, which deserves continuous attention.
The company is aimed at the next generation of gene therapy and rare diseases, and the pipeline focuses on a variety of genetically genetically related rare diseases and cancers such as ALS. Its "oral gene therapy" developed for genetic diseases has low administration difficulty, high patient accessibility, and relatively reversible treatment and low risk. It is reported that Xili Technology and Jingtai have formed pipeline achievements in the research and development of small molecule drugs targeting RNA. With the completion of the A round of financing of $30 million US dollars, it will be promoted to clinical practice.
agent Thai medicine takes into account two small molecules and mRNA markets, self-research and cooperation pipeline. Also from MIT, agent Thai Medicine was founded by Chen Hongmin, an academician of the American Academy of Engineering and a continuous successful scientist. It has successfully built the world's leading AI drug delivery platform, and has BIC strength in the field of liver targeting, and its delivery efficiency is more than 20 times that of the industry giants. Based on the current booming development of nucleic acid drugs, the application prospect of the platform is promising, and the company's self-developed pipeline is also progressing smoothly.
Although there are still uncertainties in the clinical development of new drugs, if the above companies can achieve breakthroughs, Jingtai Technology will cash in the excess benefits beyond the service fees. This also reflects the sex appeal of the platform business model represented by Recursion and Jingtai Technology:
After the delivery of the molecule, until the drug is transferred or successfully marketed, it can also charge a considerable share of sales and share the rich victory fruits of the partners' gamble. For innovative enterprises with deep cooperation, Jingtai Technology is also likely to make additional investment, and participate in the follow-up sales sharing of the pipeline through early risk sharing and higher value-added research and development services.
These ambitious FIC, BIC, AI pharmaceutical is continuing to cash its commercial value, help the start-up biological pharmaceutical enterprise breakthrough new targets, get the FDA approval and ideal clinical data, next, AI pipeline can sell in the key milestone, big drug companies expand clinical pipeline, innovative companies can also in at hundreds of millions of dollars of transactions.
The voice questioning AI pharmaceuticals have always stressed that AI molecules have not been approved for marketing. But listing is not the only commercialization goal. AI-enabled IND and clinical phase I to III pipelines can reach high deals. The financing of 30 million of Xili Technology and 100 million of Yintai Pharmaceutical also once again verified the value created by AI pharmaceutical.
Whether from big factories or innovative pharmaceutical companies, the AI pharmaceutical pipeline is still moving to the clinic, and Jingtai Technology, a widely placed bet, is also waiting for its drug development business to cash in excess profits beyond service fees.
The company's product recommendation：
1.295344-96-6 https://www.bicbiotech.com/product_detail.php?id=5465
2.284493-66-9 https://www.bicbiotech.com/product_detail.php?id=6251
3.72071-75-1 https://www.bicbiotech.com/product_detail.php?id=5466
4.453557-73-8 https://www.bicbiotech.com/product_detail.php?id=5467
5.73025-69-1 https://www.bicbiotech.com/product_detail.php?id=5468
