Deep Pharma Intelligence AI in Pharma Market Webinar Summary

        - Kate Batz, Managing Partner, Deep Knowledge Group

 

On March 2 and 3, 2021, I had the pleasure of hosting one of two virtual events focused on key market trends, events, and investor takeaways in the AI in Pharma sector alongside my co-host, Franco Cortese (Director of Aging Analytics Agency), where we were joined by a number of industry experts to present and discuss the increasing market maturation of the AI in Pharma space, from both a collaboration and partnership perspective, as well as an investment, deal-flow, M&A and IPO point of view.

 

The events were organized by Deep Pharma Intelligence, a leading provider of open source and proprietary analytics in the Pharmaceutical and AI in Pharma industry, and a new joint venture formed between Deep Knowledge Group’s DeepTech-focused analytical subsidiary, Deep Knowledge Analytics, and Biopharma Trend.

 

Day 1 (Top AI in Pharma Deals, Trends & Partnerships 2020-Q1 2021) featured presentations and a roundtable discussion on the biggest deals, partnerships, collaborations, and industry events in the AI in Pharma sector from 2020 - 2021.

Day 2 (Investment and M&A Deals: AI in Pharma Market 2021) featured talks and a panel discussion on key players, trends in the private equity and venture capital ecosystem, focusing on the increasing market maturation of AI in Pharma, and key take-aways for investors in 2021.

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Key Take-Aways & Conclusions From the Events

 

  • While global pandemics appeared to be a hard blow for the majority of economic sectors, the BioTech market saw industry developments and investments actually rise as a result — not only reaching record-breaking values for the BioTech stock index, but also showing extraordinary deal-making activity in the areas of venture capital investment and initial public offerings (IPOs). 

  • The rising trends was also observed for the sector of pharmaceutical artificial intelligence (AI) — a rapidly expanding sector involving large corporations, AI-driven biotechs, and investment bodies specifically focused on data-driven drug discovery startups. 

  • It is very clear that the AI in Pharma sector is heating up, and is approaching a period of market maturation and consolidation, where a number of AI-startups have achieved substantial leadership and grew in resources and technology, while others have lagged behind, being forced to focus on niche service-oriented segments of drug discovery. Several AI startups also went out of business, and others were acquired.

  • The total amount of VC funding in AI-biotech startups increased in 2020 by around 23%, compared to 2019, approaching a total of $1.9B, which is also more than in 2015, 2016, and 2017 combined. 

  • Meanwhile, we are seeing an increasing number of late-stage mega-rounds (e.g. B, C, Pre-IPO), including hundreds of millions, which reflects the increasing quality of players in this market, with strong business models, outstanding deal-making traction, and cutting-edge research. 

  • The market capitalization growth dynamics in the sector of AI-driven corporations significantly outperforms the global market  (represented as S&P 500 index), as well as aggregate biotech industry indices (IBB and NBI). At the same time, the segment of AI-driven pharma companies is more volatile compared to the industry average. 

  • After a paradoxically bullish year for the biotech industry, the market may see possible correction over the first half of 2021. However, the sector of pharmaceutical AI will likely outperform the general market and will continue its growth trajectory. 

  • This is explained by a systemic nature of value AI is bringing to the table — every large pharma organization is now prioritizing this technology as a strategic component in their model of innovation, driving the overall sector growth, further increase in the number of transactions and R&D collaborations, and an approaching wave of merger & acquisitions. This also stimulates investors to continue being bullish about allocating capital for AI-driven biotechs.

  • However, as the market moves towards consolidation, it is clear that its overall continued positive trajectory and stability require proportionate innovations in terms of AI, data-driven approaches to industry analytics, and InvestTech.

  • Complex and multidimensional markets require equally complex approaches for strategic decision making, and if investors, tech corporations, and pharma corporations seek to establish market dominance in the rising megatrend of AI in Pharma, they need to embrace equally sophisticated and innovative toolsets for strategy formulation and execution. 

  • As Deep Pharma Intelligence has proven, those toolsets are already here, ready to be embraced and on-boarded, and the market players that do so in practice will become the future successors of the Pharma industry as a result.

Day 1: Top AI in Pharma Deals, Trends & Partnerships 2020-Q1 2021 (March 2, 2021)

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Top AI in Pharma Deals, Trends & Partnerships 2020-Q1 2021 featured presentations and a roundtable discussion on the biggest deals, partnerships, collaborations, and industry events in the AI in Pharma sector from 2020 - 2021, as well as key findings and takeaways from Deep Pharma Intelligence's newest special analytical case study:

www.deep-pharma.tech/pharma-ai-deals

 

The event featured presentations and a roundtable discussion with: 

  • Ihor Kendiukhov (Head of Algorithmic Analytics, Deep Knowledge Group)

  • Dr. Andrii Buvailo (Director, Deep Pharma Intelligence)

  • Franco Cortese (Director, Aging Analytics Agency)

  • Special Guest Christopher Trummer (CEO, CelrisTx)

Ihor Kenduvov – Algorithms and Data for DeepTech Investment Analytics

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Ihor’s presentation focused on a showcase of Deep Pharma Intelligence’s prototype Big Data Analytics Investment Dashboard, highlighting key use cases and major functionalities. Some of the main conclusions and take-aways from his presentation included:

 

  • Deep Pharma Intelligence offers a state-of-the-art interactive online AI-based SWOT analysis system covering most of the deals in the AI-Pharma industry.

  • The product allows to conduct initial data-driven due diligence of the deals instantly, automatically, and holistically by comparing multiple parameters for each company combined in the 12 vectors of R&D and business development. The results of the analysis are represented in the easily perceived form of 2-dimensional and 3-dimensional radar charts.

  • Smart competitor matching, calculation of the distance between companies can be applied to estimate the prospects and the relevance of the deals in the industry;

  • The platform enables investors or competitors to evaluate the prospects of the deal by looking at the place of the company in the industrial networks, including collaborations, partnerships, funding rounds, scientific cooperation, connections of R&D teams and higher management, and the level of the similarity of the markets.

  • Both conventional econometric models and advanced artificial intelligence and deep learning tools are applied to extract value from stock market data for the assessment of the deals from the standpoint of publicly traded corporations.

  • Financial analytics is combined with technological evaluation of the companies.

  • Stock market simulations enable us to test various trading strategies and investment principles.

Dr. Andrii Buvailo – Biggest Deals, Partnerships & Collaborations 2021

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During his talk, Dr. Buvailo shared highlights from Deep Pharma Intelligence’s industry report

“Pharmaceutical Artificial Intelligence: Deals and Market 2020-2021”:

https://www.deep-pharma.tech/pharma-ai-deals

 

Key takeaways and conclusions from his presentation included:

 

  • 7 AI in Pharma IPOs in 2020 (including Lantern Pharma, Relay Therapeutics, Abcellera, Schrodinger, and Berkeley Lights).

    • Nanna Therapeutics acquired by Astellas to leverage AI and unique screening platform has great potential to create novel programs, leading to maximization of mitochondria-related research

    • Haystack Sciences acquired by Insitro to add AI in DNA-encoded libraries (DELs) screening and analysis capabilities

    • ● Roivant Sciences to absor Silicon Therapeutics with $450M-plus deal

  • Over $2.1 billion of venture capital raised in 2020-2021. Major deals included:

    • Insitro with their $143 million (Series B);

    • XtalPi with $319 million (Series C);

    • Atomwise with $123 million (Series B);

    • Recursion Pharmaceuticals with $239 million (series D);

    • AbCellera with the sum of $105 million (Series B). Completed IPO in December with $555.5 million in proceeds

    • (2021) Cellarity with $123 million (Series A)

    • (2021) Valo Health $190 million (Series B)

  • 2020-2021 also saw several major R&D partnerships and collaborations established, including:

    • October 2019: Insilico Medicine has inked a dual-program drug discovery deal with Jiangsu Chia Tai Fenghai Pharmaceutical (CTFH) worth up to $200 million.

    • January 2020: Bayer and British biotech firm Exscientia have announced a three-year partnership focused on the use of Artificial Intelligence in cardiovascular and oncology drug discovery.

    • March 2020: Atomwise and Bridge Biotherapeutics Sign $1 billion deal to unlock blockbuster potential in Inflammation

    • September 2020: Recursion Pharmaceuticals entered drug discovery R&D partnership with Bayer up to $100 million.

    • October 2020: Insitro signs five-year discovery collaboration with Bristol Myers Squibb to develop novel treatments for ALS and Frontotemporal Dementia, $50 million in upfront cash with total potential deal value over $2.1 billion. 

Franco Cortese – How COVID-19 is Fueling BioTech Industry Growth

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Franco Cortese’s presentation focused on the ways in which the current COVID-19 pandemic is actually serving to fuel accelerated BioTech industry activity and growth. Some of the key takeaways from his talk included:

  • It’s clear that the COVID-19 pandemic is at least in part fueling this overall growth in Healthcare and BioTech focused funding and industry activity, as it continues to accelerate government and industry cooperation and the speed of drug and diagnostic development, and as it continues to push the importance of health to the forefront of the public’s mind.

  • This is clearly true both for BioTech generally, and for the Longevity Industry, which in 2020 saw its total volume investments exceed the $156 billion mark, of which $60B were raised during the last year alone. 

  • These developments are also crossing over into the public equities and retail investment space as well, with an increasing number of Longevity-related companies going public, with the US still dominating the public markets, but with UK and Asia-based public companies growing quickly

  • And, in addition to an increasing number of Longevity focused or related companies going public, we are also seeing an increasing number of already publicly traded Longevity-related companies seeing their market caps increase year over year as well.

  • Many investors are now switching their attention from traditional assets which proved to be less relevant in times of pandemics (for example real estate, tourism, entertainment, etc.) towards the BioTech Industry 

  • This combination of factors will lead large sections of the global investment community to realize something that they should have known all along: that Health is the New Wealth, and that Health is quickly becoming recognized as the most valuable asset class.

Panel Discussion

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During the event’s panel discussion, Franco Cortese (Director, Aging Analytics Agency) moderated a conversation surrounding the biggest deals, partnerships, collaborations, and industry events in the AI in Pharma sector from 2020 - 2021, which featured Ihor Kendiukhov (Head of Algorithmic Analytics, Deep Knowledge Group), Dr. Andrii Buvailo (Director, Deep Pharma Intelligence), and special guest Christopher Trummer (CEO of CelerixTx).

 

The roundtable featured a number of topics and questions including:

  • If 2020 was the year of intensive AI in Pharma collaboration and partnerships, what major trend will 2021 be remembered for in the Ai in Pharma space?

  • While the number of collaborations in the pharmaceutical AI space is growing, what in your opinion, are some of the challenges that pharma companies face when adopting AI in their R&D programs? 

  • Considering an enormous growth of the AI in pharma market capitalization in 2020 (more than 400%), what can we expect in 2021?

  • The US has been traditionally dominating biotech, and in particular the AI aspect of it in terms of investments, numbers of biotech companies and so on.

  • Do you think there are other, new places where AI ecosystems are emerging to potentially rival US-based clusters?

Day 2: Investment and M&A Deals: AI in Pharma Market 2021 

(March 3, 2021)

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Investment and M&A Deals: AI in Pharma Market 2021 featured talks and a panel discussion on key players, trends in the private equity and venture capital ecosystem, focusing on the increasing market maturation of AI in Pharma, and key take-aways for investors in 2021, as well as key findings and takeaways from Deep Pharma Intelligence's AI in Pharma Investment Digest: https://www.deep-pharma.tech/global-investment-digest.

 

The event featured presentations and a roundtable discussion with: 

  • Dmitry Kaminskiy (General Partner, Deep Knowledge Group)

  • Ihor Kendiukhov (Head of Algorithmic Analytics, Deep Knowledge Group)

  • Dr. Andrii Buvailo (Director, Deep Pharma Intelligence)

  • Franco Cortese (Director, Aging Analytics Agency)

  • Ian Inkster (Head of Policy, Aging Analytics Agency)

 

The presenters shared their insights and statistics about the Pharmaceutical Artificial Intelligence (AI) sector, including current trends, leaders in the “AI Race”, key R&D partnership and major investment deals, and latest industry developments. Particular attention was paid to investment opportunities in this increasingly attractive market. 

 

The event also introduced the prototype of Deep Pharma Intelligence’s BigData analytics system and dashboard, designed for use by executives, decision-makers and investors in the pharmaceutical/biotech space.

Dmitry Kaminskiy – AI in Pharma – Major Trends & Investor Key Take-Aways

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Every major biotech stock index hit its All Time High in 2020

  • The FDA approved 53 new medicines -- sharing 2nd place of all time with 1996 and close to record breaking 2018

  • An all time record year for Biotech IPOs in both volume and deal activity around x2.5 more compared to 2019

  • New trend of SPAC’s as an alternative way to public markets

  • COVID19 became significant boost factor for the further growth of BioTech industry

 

AI in Drug Discovery sector is growing even faster compared with general BioTech Industry

  • 5 IPOs made in 2020

  • The are 14 publicly traded companies in AI Drug Discovery Space now

  • At least 30 R&D deals with Big pharma were made during 2020

  • Over $2.1 billion of venture capital raised in 2020-2021 in this sector

  • COVID19 catalyzed AI adoption in R&D and medicine

 

AI in Drug Discovery Market Growth Predictions made back in 2018 for 2023 

  • Acumen Research and Consulting - $4 Billions

  • Allied Market Research - $4.5 Billions

  • Fior Markets - $5 Billions 

  • Deep Knowledge Analytics - $20 Billions (and we were not enough optimistic) 

  • The current market size of AI in Drug Discovery sector is at least $40 Billions 

 

Key Take-Aways for Investors in 2021

  • Pharmaceutical AI sector is “heating up” for investments;

  • Big pharma and contract research organizations increasingly compete for AI partnerships;

  • An important driver of growth for the sector is a substantial shift in Big Pharma’s interest in AI technology from “nice to try” to “strategically important”.

  • COVID-19 pandemics appears to be a positive catalyst for the acceleration of the AI adoption;

  • Significant number of companies successfully completed rounds B,C,D, and several companies made IPO during 2020

 

2021-2022 Projections

  • The overall biotech and drug discovery sectors will be on the rise;

  • The sector of AI Pharma is maturing for a new wave of IPOs and M&As in 2021-2022;

  • Tech Corporations are becoming significant players in the AI Pharma sector and

  • potentially might be more proactive acquisitors for AI in Drug Discovery startups in the next years

  • Sector will attract significant number of non-biotech investors to enter the Life Sciences sector;

  • The activities on the secondary market deals will increase;

  • In 2022-2023 will happen maturation and consolidation of the AI Pharma Sector

Ihor Kenduhov – Big Data Analytical Systems for AI in Pharma Investment Analytics

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Ihor’s presentation showcased some of the main features and functionalities of Deep Pharma Intelligence’s Big Analytica Dashboard.

 

Some key take-awys from his talk included:

 

  • Deep Pharma Intelligence offers state-of-the-art interactive online AI-based SWOT analysis system covering most of the companies and investors in the AI-Pharma industry.

  • The product allows to conduct initial data-driven due diligence of the companies instantly, automatically, and holistically by comparing multiple parameters for each company combined in the 12 vectors of R&D and business development. The results of the analysis are represented in easily perceived form of 2-dimensional and 3-dimensional radar charts.

  • Smart competitor matching, calculation of the distance between companies.

  • The platform features AI-driven automatized multiparametric companies clusterization via the implementation of unsupervised machine learning.

  • The platform enables investors or competitors to evaluate the prospects of the company by looking at its place in the industry networks, including collaborations, partnerships, funding rounds, scientific cooperation, connections of R&D teams and higher management, and the level of the similarity of the markets.

  • Both conventional econometric models and advanced artificial intelligence and deep learning tools are applied to extract value from stock market data.

  • Financial analytics is combined with technological evaluation of the companies.

  • Stock market simulations enable us to test various trading strategies and investment principles.

Dr. Andrii Buvailo – Key Investment Take-Aways from "Pharmaceutical Artificial Intelligence: Deals and Market 2020-2021"

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During his talk, Dr. Buvailo shared highlights from Deep Pharma Intelligence’s industry report

“Pharmaceutical Artificial Intelligence:Deals and Market 2020-2021”: https://www.deep-pharma.tech/pharma-ai-deals

 

Key take-aways and conclusions from his presentation included:

 

  • BioTech industry is heating up over 2020-2021:

  • The FDA approved 53 new medicines sharing 2nd place of all time with 1996 and close to record breaking 2018.

  • An all time record year for Biotech IPOs in both volume and deal activity 

  • Every major biotech stock index hit its All Time High in 2020

  • Venture capital funding in biotech hit an All Time High VC-funding invested into US-based biotech firms in 2020

  • At least 30 R&D deals with Big pharma in 2020

  • New players are entering the game: AI-as-a-Service CROs, big tech corporations, big-data providers, infrastructure providers

  • AI is not just a tool to improve research, it is an enabler of new business models

  • New kind of partnership models are created with new technologies: block-chain, federated learning, quantum computing orchestrated by AI

  • AI- and infrastructure vendors are becoming strategic partners, and not just service providers 

  • The Industry is heading to “Platform-Driven” R&D Enabled by AI and Automation

  • Building such vertically integrated R&D platforms is infeasible within one organization, no matter how big

  • Intensive Collaboration and Building Ecosystems is a New Norm in the AI-era

Franco Cortese – Longevity Industry Big Data Analytical Dashboards

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Franco Cortese gave a talk that summarized key take-awys from Aging Analytics Agency’s recently released Longevity Investment Digest and Longevity Investment Big Data Analytics Dashboard

 

Longevity Investment Digest Key Take-Aways

  • In 2020 the total volume investments into Longevity focused or related companies globally had crossed the $156 billion mark, of which $60B were raised during the last year alone.

  • Overall, Longevity-focused and related companies saw 30% growth in investments compared to the previous year, with the total funding for the top-8 most funded such companies exceeding $500 million by the end of 2020. 

  • These developments are also crossing over into the public equities and retail investment space as well, with an increasing number of Longevity-related companies going public, with the US still dominating the public markets, but with UK and Asia-based public companies growing quickly.

  • And, in addition to an increasing number of Longevity focused or related companies going public, we are also seeing an increasing number of already publicly traded Longevity-related companies seeing their market caps increase year over year as well. 

  • Despite the Covid-19 pandemic, all new public companies in this space announced successful closing of the IPO. They show volatile but steady growth, although net income of all corporations remains negative. Most IPOs took place in the USA in the second half. 

  • All companies have beta smaller than 1 (although positive) which means that longevity stock prices move in accordance with general market movements, yet the degree of these movements is lower (although volatility as measured by standard deviation can be relatively high).

  • Aging Analytics Agency’s Longevity stock index includes more than 300 longevity-related corporations operating in biotech and IT sectors. Longevity corporations market capitalization growth strongly outperforms the market as a whole (represented as S&P500 index), as well as general biotech industry indices (IBB and NBI), although longevity stock market segment is more volatile compared to them (as measured by standard deviation). 

  • Interestingly, distribution of the returns of the longevity stock market segment is right-skewed, what differentiates it from the vast majority of stock indices and segments. It means that rare extraordinary positive events play a large role in the dynamics of the market capitalization of the segment, which can be described as the presence of “anti-black swans”. Many other indices are, contrary, characterized by negative skewness, what means that extraordinary negative events are more likely. 


Longevity Investment Dashboard Key Take-Aways

  • Aging Analytics Agency’s Longevity Investment Big Data Analytics Dashboard serves as an analogue to Deep Pharma Intelligence’s Big Data Analytical Dashboard, focused on the global Longevity industry, and including 20k companies and 9k investors. 

  • These systems were first applied to the AI in Pharma sector, which has a lower number of players and a lower degree of cross-technology and cross-domain intersectionality than Longevity (although a still very high degree of these features compared to most other industries).

  • Following its validation there, Deep Knowledge Group to retune and re-apply it to the much larger Global Longevity Industry, with quite positive results. 

  • The dashboard itself uses almost 5 million individual data points split across 20 thousand companies, 9 thousand investors, 14 sectors and 140 subsectors in order to facilitate targeted and tunable comparative analytics, entity and technology benchmarking, competitor prediction and smart-matching, advanced data visualization and other features within the full scope of the Global Longevity Industry. 

  • The official roll-out of the dashboard beta is scheduled for Q2 2021, but interested viewers can view the dashboard alpha already now at www.aginganalytics.com/longevity-investment-dashboard, and explore some of its current features, which include an AI-driven company and investor smart-matching and competitor prediction engine, automated and semi-automated company SWOT analysis, machine-learning based database exploration and financial indicator prediction, as well as stock market analytics and forecasting, among others.

Ian Inkster – Longevity Policy and Governance Analytics

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Ian Inkster’s talk focused on recent developments relating to Aging Analytics Agency’s Longevity Policy and Governance Big Data Analytical Dashboard.

 

  • The Longevity Policy and Governance Big Data Analytical Dashboard, which applies the back-end analytical technologies and machine intelligence developed by Deep Knowledge Group first to the AI in Drug Discovery Space, and then to Longevity Investment Analytics, and also to the even more complex arena of Longevity Policy and Governance Analytics.

  • The arena of policy and governance is even more complex to model and predictive forecast than an industry, involving interaction between not just technologies and industry players, but also national healthcare systems, financial systems, governmental policy and society, all at once.

  • While the dashboard is named the Longevity Policy and Governance dashboard, at its heart it goes beyond what most would consider Longevity, encompassing the full set of systems and technologies impacting overall healthcare progressiveness, from both an industry standpoint and a population health and national healthcare system standpoint. 

  • In producing market intelligence on the overall state of healthcare industries and systems in different regions, investors can get a better understanding of the actual BioTech and health-focused assets of a given region, encompassing companies, technologies, investments and more, and it is likely that regions with high healthcare progressiveness rankings in the dashboard would also constitute prospective regional priorities for investors from an investment strategy standpoint.

  • While the dashboard is still in development and its results are still preliminary, Aging Analytics Agency was happily surprised by the actual feasibility of the results, and will be rolling out several additional features in the months to come, including:

    • Reinforcement learning for comparative Longevity Policy analysis

    • Automated Longevity policy initiative and development plan benchmarking (ranking)

    • Semi-automated SWOT analysis on region-specific  Longevity governance and policy projects and

    • Semi-automated Practical recommendations to optimize Longevity policy and governance strategy

Panel Discussion

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During the event’s panel discussion, Franco Cortese (Director, Aging Analytics Agency) moderated a conversation surrounding AI in Pharma investment trends with Dmitry Kaminskiy (General Partner, Deep Knowledge Group), Ihor Kendiukhov (Head of Algorithmic Analytics, Deep Knowledge Group), Dr. Andrii Buvailo (Director, Deep Pharma Intelligence), and Ian Inkster (Head of Policy, Aging Analytics Agency).

 

The roundtable featured a number of topics and questions including:

  • Of all AI in Pharma sectors, are there any that stood out in terms of having a particularly high growth rate in investments, M&A deals or IPOs/SPACs?

  • With increasing levels of corporate activity in this space, is there still room for startups?

  • Both pharma corporation and tech corporations seem to be moving into this space fast. Of those 2, which seems more proactive?

  • The USA still seems to be dominating the investment landscape in this space. What other regions might overtake them in the years to come?

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