Investors may get evidence of AI assisting drug discovery in second half | Wilnesh News
As investors look to the future and imagine which industries are ripe for reinvention and invigoration through artificial intelligence, drug discovery is quickly becoming an obvious choice. Each new drug that comes to market is the product of billions of dollars of investment and typically takes at least a decade to come to fruition. The road to commercialization is often fraught with costly trial and error when it comes to screening and selecting drug candidates. Only then can a compound pass the rigorous, years-long clinical trial process, in which reams of data are generated, processed and submitted for review—none of which guarantee success. Now, many in the field expect artificial intelligence to help speed up this process by making various pieces of the puzzle more efficient and effective. Analysts who have been following companies at the forefront of using generative artificial intelligence for drug discovery say it’s still early days. But as more AI-assisted drugs come to market through the company’s pipeline, excitement and investor interest are building. Some tech investors looking for companies to benefit from advances in artificial intelligence are paying close attention to the health care sector. KeyBanc Capital Markets analyst Scott Schoenhaus said Recursion Pharmaceuticals will release clinical data in the second half of this year, while AbCellera and Schrodinger are expected to release data in the first half of next year. Schonhaus said the events would help determine the valuation of the group’s shares. So far, the AI trade has favored more immediate beneficiaries, such as Nvidia, the maker of the processors that run the systems. But for investors who are willing to take the risk and believe that artificial intelligence will lead to more successful and cost-effective drug development, here are some of the leading companies in the field. Everyone has their own technology and different business models. Recursion Pharmaceuticals Recursion CEO Chris Gibson caused a stir when he appeared on stage with Nvidia CEO Jensen Huang at the June 24 analyst conference. The semiconductor company not only helped bolster Recursion’s computing power, but is also an investor, most recently taking a 3.4% stake, according to FactSet. Cathie Wood’s ARK Investment Management is the largest institutional investor, with a 10.7% stake. But the recognition didn’t lift Recursion’s stock price out of its doldrums. The stock is down 26% year to date. Recursion told analysts it expects to share seven clinical readouts over the next 18 months, including four Phase 2 data sets. The news briefly cheered investors, but two days later, the company announced a second stock sale to raise cash, and the stock price plummeted. RXRX 1Y Mountain recursive stocks over the past year. Leerink Partners analyst Mani Foroohar said in a research note that past clinical development delays have raised doubts about the company, making it a “let me see” story. “We strive to identify meaningful near-term catalysts to counter these concerns and validate Recursion’s advantages in speed and probability of success in drug development,” Foroohar wrote. In other words, the risk to the clinical data Recursion will report is high because It will help prove that its tools will save companies time and money. Recursion’s first chance to prove itself will come in September, with data expected from a Phase 2 trial of REC-994, a drug that treats cerebral cavernoma (CCM), a disease that can cause Bleeding in the brain or spinal cord. KeyBanc’s Schoenhaus said there are approximately 360,000 symptomatic CCM patients in the United States and the European Union, where the therapy has received orphan drug designation. Needham analyst Gil Blum said the main goal of the study was to assess safety, but it was also an opportunity to assess its clinical benefit. Along with other results to be released over the next 18 months, Recursion will likely begin validating its platform. Once its technology is proven, there could be greater benefits from its partners, which now include Bayer. The pharmaceutical company will become a beta user of Recursion’s LOWE (Large Language Model Orchestration Workflow Engine), and the two companies will also collaborate on oncology research. Blum also pointed out that Recursion has Biohive-2, the fastest supercomputer in the biopharmaceutical field. The data it collects is creating a flywheel that can lead to the creation of other models. “If you believe this is an important field and you believe artificial intelligence is going to have a significant impact on biology in the next five years, then I don’t think you have any other meaningful bets,” Bloom said in an interview. ” Not in the public domain; maybe in the private domain.” AbCellera The beauty of AbCellera is that it has a wealth of data on immune cells and antibodies that can be scanned to identify drug candidates. The library has been shown to help partner Eli Lilly find a monoclonal antibody, bamlanivimab, to treat Covid-19. AbCellera has prioritized partnerships, with partners including oncology-focused Prelude Therapeutics and Incyte and Biogen working to discover antibodies that can deliver treatments across the blood-brain barrier. ABCL 1Y Mountain AbCellera stock over the past year. AbCellera’s internal research is still in the very early stages. KeyBanc’s Schoenhaus said a program in metabolic and endocrine diseases could lead to first-in-class treatments. He expects an investigational new drug application to be submitted early next year. Schoenhaus said it expects to receive submissions next year for a treatment for atopic dermatitis and a drug for inflammatory bowel disease, giving the drug a market opportunity of $17 billion by 2032. Although the company’s market value has more than halved this year, analysts agree the company is equivalent to a Buy. The average price target is $14.63, according to FactSet. That’s well above AbCellera’s closing price on Wednesday and just a few pennies above its 52-week low of $2.69. “With a proven engine, a strong balance sheet, a proven strategy focused on high-value strategic partnerships, and what we believe is most importantly, a preference to bring internal assets to greater value inflection points before partnering, we “The name, especially as we gain more visibility internally and on partner projects,” Allison Bratzel, an analyst who likes Piper Sandler, wrote in a research note in late May. Relay Therapeutics Relay Therapeutics focuses on how proteins interact with other compounds and is applying this strategy to targeted oncology and genetic diseases. The company says its Dynamo platform can reduce the time needed to find drug candidates. For example, the company “I almost think Relay has shown us proof of concept,” Goldman Sachs analyst Salveen Richter said in an interview. . “They are really able to take motion-based drug design and apply it to improve existing goals or pursue goals. ” Still, work on its top drug candidate, RLY-2608, is being closely watched as it will provide commercial opportunities for Relay. An update on the Phase 1b trial of RLY-2608, which treats a type of breast cancer, is expected in the fourth quarter of this year announced. Relay has also shown that RLY-2608 may work beyond this type of breast cancer. In May, Barclays analyst Peter Lawson upgraded Relay stock to “overweight” and said he believed the RLY-2608 trial update will. Showing superior efficacy and safety. Lawson sees a 70% chance of positive data from the trial, which is expected to boost the stock. But currently, the stock is down 43% year-to-date, and some insiders have done so recently. The sell-off has weighed on market sentiment. RLAY 1Y mountain Relay Therapeutics stock has been unanimous over the past year, however, with all analysts covering the company rating the stock a Buy. Ge’s computing platform uses a physics-centric approach to help find better drug targets. The company licenses the software to other biopharmaceutical companies and has recently begun working on developing its own product pipeline and collaborating with other companies. , including Japan’s Takeda Pharmaceuticals. By later this year or early next year, Schrödinger should be able to share phase 1 data for SGR-1505, an experimental MALT1 inhibitor for non-Hodgkin’s B-cell lymphoma. Data for its other drug candidate, SGR-2921, will follow. A phase 1 dose-escalation trial for a third drug, SGR-3515, should begin this quarter. Like other companies in the space, the company’s stock has suffered this year. SDGR 1Y Schrödinger shares have fallen over the past year. Leerink’s Foroohar initiated coverage on the stock with an outperform rating and a $29 price target, implying a 44% upside from Wednesday’s closing price. Despite recent fluctuations in software revenue (quarter to quarter) as large customers transition from on-premises to hosted licenses (partly accounting/timing effects), SDGR’s physics-based modeling software remains the most mature in its niche software,” Foroohar wrote. He expects Schrödinger to benefit from an improvement in the biotech financing environment that may occur next year. If that materializes and new customer growth returns to mid-teens rates, Foroohar expects His price target would rise by about $9. He said the stock could also exceed his target if the company’s collaborations or internal research yield positive results. Some naysayers have been concerned that the drug discovery industry will become more technology-driven. Schrödinger would be hurt by crowding, and by big pharma companies like Amgen pursuing their own in-house efforts, but Fruhar called that scenario “unlikely.”
