An AI drug developer flies under the radar

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The inefficiency of drug development is well documented, but let’s cite some numbers.

Less than 8% of drug candidates entering Phase 1 clinical trials receive regulatory approval. This suggests that companies handle the complexities of biology poorly.

In fact, a survey published in Nature in 2016 found that more than 80% of chemists and biologists could not reproduce the results of peer-reviewed papers – widely recognized as the gold standard of scientific research. Worse still, surveys show that 60% of biologists failed to reproduce their own results,

This terrible inefficiency explains why the industry has turned to artificial intelligence in recent years. Drug developers hope computer models and simulations can identify as quickly as possible when experimental treatments are most likely to fail. Searching for chemical compounds with the best chance of success in drug discovery would also help.

If done right, they could shave years off their time to market and save hundreds of millions of dollars.

Though many of the world’s largest drugmakers are using AI internally, they are increasingly partnering with an emerging group of computing companies.

Schrödinger is probably better known to investors (SDGR) – Schrödinger Inc. receives report and recursion of drugs (rxrx) – Recursion Pharmaceuticals Inc. for inclusion in popular ETFs. get report.

But the eccentrics (EXAI) be better positioned for long-term success.

Using AI to improve drug development

Excitia was the first company to advance clinical trials of a drug candidate developed with artificial intelligence.

In the meantime, it has developed calculation models that have shown that cancer treatments can be individually adapted for individual patients – also a first.

A British drug developer has created an end-to-end platform that combines laboratory-generated experimental data with computer models refined by its scientists.

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The novel approach is embodied in the company’s workforce, with 45% of employees working in software and 42% in drug discovery.

How does this work? First, Exscientia targets the molecular target responsible for causing disease. Then scientists punch out more than a billion chemical compounds that can act against the target and work out acceptable drug-like properties, such as: B. the ability not to be excreted by the body or to damage healthy cells.

After identifying promising search candidates, the drug candidates are tested in an automated laboratory powered by robots and monitored by nerds in lab coats.

The overall process increases the likelihood that a company will find a successful drug candidate among billions of possible alternatives, increases research reproducibility, shortens preclinical research timelines and significantly reduces costs.

What does this mean for investors? Well, by one estimate, an Exscientia pre-clinical asset could be worth about seven times (593%) the industry average. This could result in a sustained premium for the tech-enabled drugmaker’s shares relative to more traditional peers.

Could Xcentia Stock Fetch More Value?

A pre-commercial drug developer has no recurring revenue, let alone revenue. That means investors need to estimate a pipeline’s NPV — and it’s hardly an exact science.

But reducing the error rate in drug development can significantly increase the calculated total. Excentia shares study showing it can increase NPV of pre-clinical assets from $10.7 million to $74.2 million if technology platform improves drug development efficiency by 5% at every stage of research and development increases. makes improvements.

Wall Street is still taking a wait-and-see approach to Xcentia. It’s not a bad idea. Finally, it can be difficult to separate legitimate advances in artificial intelligence from hype, especially in the early days of technology-enabled drug development.

The small-cap biotech needs multiple breakthroughs over the coming years to prove its approach isn’t temporary.

Luckily, the platform is well positioned to respond to the market. Excentia had $720 million in cash at the end of March 2022, 33 active programs and 12 drug development collaborations. The company received an additional $100 million from Sanofi after the quarter ended (SNY) – Get the Sanofi report that tapped a British investigator for a massive partnership.

For now, investors can keep an eye on this under-the-radar biotech stock. If artificial intelligence proves successful in increasing the efficiency of drug development, Xcentia will likely be one of the leaders.

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