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The global artificial intelligence in drug discovery market is projected to grow at 22% CAGR from $1.7 billion in 2023 to reach $11.93 billion by 2033. The healthcare industry is increasingly adopting AI solutions to alleviate the significant financial burdens and potential setbacks that are associated with the drug discovery process. Hong Kong’s InSilico Medicine is one such leading player in the market.

Insilico Medicine’s Offerings
Insilico Medicine was founded in 2014 by Alex Zhavoronkov, an alumnus of the Johns Hopkins University with a master’s degree in biotechnology. The company was set up with a focus on discovering new targets within intractable diseases and then identifying compounds that could treat the diseases. Since then, the company has grown into a biotech player that is working to create AI-designed drugs that are currently being tested in human clinical studies.Headquartered in Hong Kong, Insilico operates its robotics lab out of Suzhou, China. It is now working on a mission to accelerate drug discovery and development by leveraging its proprietary Pharma.AI platform across biology, chemistry, and clinical development. Essentially, it uses its AI platform for two key functions – identify targets for new drugs, and then design treatments using these drugs. Its AI platform helps it go through this two-step process at a much faster pace than traditional drug discovery methods.The acceleration was visible in 2019, when focus on discovering new targets that might work against fibrosis, narrowed down those molecules to the most promising six, and then synthesized and demonstrated potential of the most promising molecule in live mice within a period of 46 days. By 2021, Insilico revealed the novel molecule, ISM001-055, targeted to address idiopathic pulmonary fibrosis. It went from the focus on discovering new targets. Traditional drug discovery takes decades and costs over $2.5 billion before bringing a drug to market.By the summer of 2024, Insilico had 15 candidate drugs focusing on treating fibrosis, oncology, immunology, and other therapeutic areas. Six of these had gained approval for trials as Investigational New Drugs. Small-molecule candidate, ISM001-055, is among the fastest-moving pipeline candidate in its portfolio. Analysts believe that if the drug is released, it will be one of the first drugs to be identified by AI for treatment. ISM001-055 is currently undergoing Phase II trials in nearly 40 research centers in China and the United States for treatment of idiopathic pulmonary fibrosis (IPF). In November, the company announced positive topline results from the Phase IIa trial of the drug. The success of the drug could redefine InSilico’s business prospects.

Insilico Medicine’s Financials
Insilico earns revenues through three key business segments: pipeline drug development, drug discovery services, and software solution services. Pipeline segment is its biggest revenue generating segment where candidate drugs are developed in-house and then licensed out or taken to market. Drug discovery services allow Insilico to work with other third-party pharmaceutical companies on drug discovery, charging them a service fees to identify targets related to specific diseases and develop drugs using its Pharma.AI platform. Additionally, it earns software revenues by licensing access of its platform to companies for a subscription fee. InSilico’s customer list includes names like Eli Lilly and Novo Nordisk.In 2023, its revenues grew 70% to $51.2 million of which $39 million came from its pipeline segment. Revenues from drug discovery services were at $8.79 million last year, and software solutions revenues came in at $3.36 million. Losses fell 5% in the year and came in at $211 million.Insilico has tried to go public twice so far. It had attempted to list in New York in 2021, and then withdrew its application. Last year, it tried to list in Hong Kong, but backed away from there as well. It remains privately held for now and has raised $400 million in funding so far from investors including Qiming Venture Partners, Sinovation Ventures, Hillhouse Investment, WuXi AppTec, and Fosun Pharmaceutical. In a 2022 funding round, Insilico was valued at $895 million. Earlier this week, the company announced another $100 million funding round led by Shanghai’s Pudong Venture Capital and Hong Kong’s Value Partners Group. Valuation for the new round is not disclosed.More By This Author:AI Drug Discovery Stocks: Recursion Pharmaceuticals Has A Long Road Ahead
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