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Presentation by Dmitry Kaminskiy: Keypoints

Keypoints by Dmitry Kaminskiy

AI in Pharma Investment Trends: Major Take-Aways

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  • The segment of pharmaceutical AI continues consolidation; 

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

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

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

  • A number of companies successfully completed rounds B,C and D, and one company made IPO

 

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Global Context

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  • US remains the major player and driver in AI in Pharma 

  • China’s activities are rapidly growing and the region is exhibiting extensive investment activity 

  • UK and Europe has traditionally been a strong ground for biopharma activity, and continues to be

 

2021-2022 Projections

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

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

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

  • The activities in the secondary market deals will increase; 

  • The year 2022 can be considered the year for matured consolidation of the AI Pharma Sector

 

Extended Key Points and Key Trends for 2020

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  • The AI Pharma Market and Landscape continues to grow exponentially; as of 2020 it contains:

    • 240 Companies (actual scope around 400) 

    • 600 Investors (actual scope around 1400 )

    • 90 Corporations (actual scope around 200)

  • Number and size of investments are also growing rapidly. Some of the major deals between Q4 2019 - Q4 2020 include:

    • XtalPi - $319 million (Round C)

    • Recursion Pharmaceuticals - $239 million (Round D)

    • Schrodinger IPO - $232 Million

    • Insitro - $143 million (Round B)

    • Atomwise with $123 million (Series B)

    • AbCellera - $105 million (Round B)

    • Insilico Medicine - $39 million (Round B) 

  • 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”. 

  • Such increasing market demand will drive more exits in future, and is important for heating up investor’s interest in this sector.

  • The rising interest of leading pharma and contract research organizations towards AI-driven biotech startups is a major driver for the area to become more attractive to investors, since the industry is becoming well-suited for successful exit strategies in future. 

  • The leading players by the amount of major industry partnerships are Bayer, Pfizer and AstraZeneca. 

  • These companies demonstrate increasing commitment to probing the grounds in the AI space — by investing into internal programs, as well as partnering with external AI vendors to pilot programs in drug discovery and other research areas. 

  • The most common type of deals is true partnerships and cost-saving deals.

  • The leading big pharma brands are increasingly open to partnerships with AI startups and biotechs to get a competitive edge, and mitigate the problem of declining R&D efficiency

  • The biggest number of AI in Drug Discovery deals was conducted by Exscientia. 

  • The company engages in small molecule drug discovery, selective single target molecules, bispecific small molecules, and phenotypic drug design. 

  • All of the deals concluded by this company were categorized as cost-saving, and increasing operational efficiency due to the nature of the services provided.

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