December 17, 2024

Double duty

Hi there,

Big pharma is doubling down on AI drug discovery.

All 10 of the largest big pharma players globally have partnered with AI drug discovery startups since 2023. 

And 9 out of 10 are simultaneously developing in-house AI-powered discovery engines.

They’re also buying up therapeutics from AI drug discovery players. 

For example, Takeda spent $4B on Nimbus Therapeutics’ plaque psoriasis treatment in 2023.

What’s driving activity?

Bringing a drug to market costs an average of $1.3B. 

AI has the potential to dramatically accelerate drug discovery and reduce costs across 4 primary applications: 

• Target identification: Using AI to pinpoint disease-related targets, often proteins
• Drug repurposing: Finding new uses for existing drugs (work smarter, not harder)
• Drug-target interactions: Predicting which compounds will work best
• Generative chemistry: Suggesting entirely new compounds

Inside the AI drug discovery arms race is the first report for CB Insights customers in a 3-part series on how AI is reshaping discovery, pre-clinical, and clinical research in drug R&D. Interested in access? Reach out to us here. 

M&A activity jumps

AI drug discovery M&A is surging: 8 of the 10 largest deals in the sector have happened since 2023. 

This is driven by a maturing technology landscape and urgency among larger players to bring AI tech in-house.

We based our analysis on the CB Insights AI in drug discovery Expert Collection. The dataset includes over 500 companies applying AI to the discovery phase, defined here as the period between project inception and lead nomination.

Looking ahead

AI-generated drugs still need to pass the clinical test. 

Both Exscientia and Benevolent AI ended clinical trials early in 2023 for AI-designed drugs, while others like Nimbus and Insilico Medicine have moved on to later stages. 

Success in late-stage trials would validate AI’s potential, while continued setbacks could slow adoption.

CB Insights customers can see clinical candidates to watch, AI acquisition targets, and what’s next for the space here.

TLDR — Tech loves drama, right?

Here's a roundup of recent tech drama:

• The Circle Game: A Waymo robotaxi got caught looping a San Francisco roundabout in what is now a viral video. The company says no passengers were onboard and has since rolled out a software update to fix the glitch.
  
  
• Dystopia sells: Artisan CEO Jaspar Carmichael-Jack is leaning into outrage over the startup’s “Stop hiring humans” billboards plastered across San Francisco. The company — which builds AI sales agents — has faced backlash, with critics calling the ads a “dystopian nightmare.” Carmichael-Jack says they’re driving sales.
  
  
• Enemies with benefits: Mark Zuckerberg and Elon Musk, longtime rivals, are aligning against OpenAI’s for-profit switch. Meta urged the state of California to intervene, accusing OpenAI of “reappropriating assets it built as a charity,” while Musk has criticized its move as anti-competitive.
  
  
• AI’s underbelly?: Scale AI CEO Alexandr Wang is facing a lawsuit accusing the $14B startup of exploiting workers with “Orwellian” surveillance, bait-and-switch pay, and emotionally disturbing AI training tasks. Scale AI has denied the claims, pointing to its safeguards and wellness programs.
  
  
• GM fallout: Former Cruise CEO Kyle Vogt called GM “a bunch of dummies” on X after the automaker pulled funding for Cruise, its robotaxi subsidiary. Vogt had stepped down in November 2023 following a recall of Cruise’s vehicles.

Source: X

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. ICYMI, our list of the 50 most promising digital health startups dropped earlier this month. See the winners here.

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