Which companies are shaping the AI drug discovery industry at the moment?

The need to rethink the way we approach the discovery and development of new drugs has become more and more clear over the past two decades. In our previous blog post, we discussed the enormous cost and effort needed to discover new drugs and how AI and automation can help reduce them. This potential has attracted the attention of a new generation of scientists and entrepreneurs in a field that is rapidly gathering momentum.

Our series of blog posts provides a bird’s eye view of this field. We have discussed the role played by different geographies and the main AI techniques used by innovators and scientists to revolutionize drug discovery. This time, we highlight some of the key players—big and small—driving the AI drug discovery (AIDD) revolution. This is by no means an exhaustive list, but instead an invitation to explore a highly dynamic ecosystem. 

Funding for AIDD firms is surging

There is immense promise ahead and the AIDD market is expected to reach $5.1 Bn by 2025. Big pharma and tech, along with over 230 emerging startups, deploy AI to improve and transform drug discovery. Private investment in AI for healthcare applications, including AIDD, has skyrocketed. Funding increased 4.5 times from 2019 to 2020 to reach $13.8 Bn and become the most sought-after segment for investments in AI in general.

2021 has witnessed several significant rounds for AIDD firms. In April, Exscientia announced a $225M Series D led by SoftBank. In June, Insilico Medicine raised $255M in an oversubscribed Series C. The following month, Toronto-based Deep Genomics closed a $180M round and established new offices in Boston. Then in August, AIDD firm XtalPi secured $400M in their Series D

Other companies in the space chose to go public to fuel their growth. Drug discovery company Schrödinger Inc. raised a $232M IPO in February 2020. A few months later, Relay Therapeutics closed a $460M upsized IPO in the third-largest biotech IPO to date. In July 2020, Berkeley Lights’ raised $178.2M in their IPO. Abcellera followed up towards the end of the year with an IPO reaching an astonishing $555.5M in gross proceeds. This year Lantern Pharma and Recursion Pharmaceuticals closed public offerings at $69M and $436M respectively.

Companies breaking new ground 

AI-generated compounds are rapidly advancing towards the clinic. Remarkably, some of the most impressive results are coming from companies less than 10 years old.

For instance, Insilico Medicine used their AI platform to discover  a novel biological target and generated a novel small molecule to treat Idiopathic Pulmonary Fibrosis in record time. Phase I clinical trials for their compound are scheduled to begin in December this year. An AI-designed drug candidate to treat Alzheimer’s Disease resulting from a collaboration between Exscientia and Sumitomo Dainippon is planned to enter Phase I clinical trials.

Meanwhile, BenevolentAI identified a novel target for ulcerative colitis and advanced a candidate to IND-enabling studies. In May this year, Recursion Pharmaceuticals announced  that their first AI-developed lead was ready to enter IND-enabling studies for prevention of recurrent Clostridium difficile infections.

Big Tech is entering the field

Pharma revenues totalled $1.27 Tn in 2020, while Big tech has tremendous experience deploying AI systems – and they are now joining forces in collaborations across the healthcare and life sciences ecosystem

Novartis and Microsoft created an AI Innovation Lab to benefit from Microsoft’s AI technologies and Novartis’ life sciences expertise. Facebook has also shown interest in the space. Recently, Facebook AI Research and the Helmholtz Centre in Munich released an AI method that could help find new drug combinations for cancer treatment. Google Quantum AI and Boehringer Ingelheim signed a collaborative agreement to research and implement quantum computing in pharma research and development. And just a few months ago DeepMind, the London-headquartered AI-focused company that became part of Alphabet Inc. in 2014 made headlines by solving the famed protein folding problem

Chinese Big Tech is no exception: Tencent launched the AI-driven drug discovery platform iDrug last year. Baidu reportedly raised $2 Bn for BioMap, a new biotech startup focusing on drug discovery and AI-powered diagnosis. Huawei has also launched programs in drug discovery and medical imaging through its cloud computing unit. Meanwhile, TikTok’s parent company, ByteDance, started recruiting AIDD talent across Mountain View, Shanghai, and Beijing.

Big Pharma remains a key player

The increasing adoption of new technologies and tools (especially AI) is driving rapid change in the pharmaceutical industry. To keep an innovative edge, big pharma is forming alliances with AIDD startups and scaleups. Almost 100 partnerships have been identified between AI companies and Big Pharma companies since 2015. Notable examples are Exscientia’s partnerships with BMS and Sumitomo Dainippon, Insilico Medicine’s with Pfizer and Huadong, and Recursion Pharma’s with Takeda and Bayer.

In parallel to working with AI-first players, leading pharma companies are also actively and rapidly developing in-house AI capabilities. GSK set up an AI unit in 2017 and established an AI hub in King’s Cross in 2020. AstraZeneca partnered directly with hardware provider NVIDIA and the University of Florida to boost their drug discovery pipeline. Other key players like Novartis, Roche, and Bayer are doing the same. 

Outlook

Artificial intelligence is poised to transform drug discovery. The change that is coming to the industry will include not only the adoption of new tools, but also the emergence of new companies, new business models, and new partnerships. It is exciting to think about what drug discovery will look like towards the end of the decade. What will prove to be the winning technological approaches? Who will be the leaders in this new industry? We’ll keep our eyes open. 

Did you find our blog series insightful? We are preparing two more posts reflecting on the AIDD ecosystem, next time we will take a closer look at Pharmaceutical companies and their role in AI-powered drug discovery and the partnerships that are defining the sphere.