What’s going on?
Biotech firm Insilico Medicine has just set a new era of drug-making in motion.
What does this mean?
AI seems to be accelerating at warp speed these days, and the fast-moving tech has been sharing its momentum with almost every industry out there. This time, it’s drug-making that’s getting a turbo-boost. Biotech firm Insilico Medicine announced that its new lung disease drug is the first drug entirely discovered and developed by AI to reach phase-II clinical trials. And that’s pretty exciting. See, the firm – which is backed by investment giant Warburg Pincus and Chinese conglomerate Fosun Group – is one of the frontrunners in the AI-powered drug development space. This venture, then, could be a watershed moment in the race for what Morgan Stanley calls AI’s $50 billion opportunity in the sector.
Why should I care?
The bigger picture: Failing faster.
This gambit isn’t guaranteed to be a winner, mind you: last month Benelovent AI, a London-based biotech firm, laid off half its staff when its leading drug prospect failed to bear fruit. But that’s not an indictment of the whole AI-powered industry. After all, most new drugs fail anyway, and AI’s ability to crunch tons of data, identify proteins associated with diseases, and propose medicines to target them saves heaps of time. That means the smart tech can make failed drugs less costly – and successful ones easier to find.
For markets: Watch the dips.
AI hype seems to be propping up the markets these days – but analysts at Barclays don’t see an all-out collapse of the high-tech boom in the cards. In fact, they see any dips in AI-related stocks as buying opportunities, not as heralds of imminent disaster. Their reasoning: recent stock rallies have been concentrated in profitable businesses, and valuation metrics aren’t crazy either – so the stocks could still have more room to run.
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Originally Posted June 26, 2023 – “High” Tech
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