XtalPi, AI Drug Discovery Unicorn, Surpasses HK$50 Billion Market Cap Following Strategic Partnership and Strong Stock Performance

Sep 09, 2024 13:29 CST Updated 13:29

XtalPi

Computation-Driven Innovative Drug R&D Provider

Recently, XtalPi, the AI pharmaceutical unicorn based in Shenzhen, has announced more good news. The company signed a RMB 1 billion, five-year strategic cooperation agreement on new energy with GCL Group, driving its stock price to climb for multiple consecutive trading days, with its market value surpassing HKD 50 billion!

XtalPi Successfully Listed on the Hong Kong Stock Exchange on June 13, 2024. Notably, XtalPi's listing was under the new rules for specialized technology companies.（18C）Since its launch on March 31, 2023, the first successfully listed company has not only witnessed the fruits of capital market system innovation but also, with its unique technological innovation capabilities and forward-looking market layout, become a focal point in both the technology and financial sectors.

Since its listing, the company's secondary market has overall shown a steady upward trend, especially with a cumulative increase of over 1.5 times in the past 7 trading days. Compared with the issue price of HK$5.28, the cumulative increase has reached 186%, and the market value has also broken through HK$50 billion.

The prospectus shows that XtalPi was established in 2015. Compared with major global AI drug discovery companies, XtalPi is one of the few pharmaceutical and materials science R&D companies that simultaneously possesses first-principles calculation based on quantum physics, AI technology, and automated wet lab capabilities.

Currently, XtalPi has provided services to over 100 biotechnology and pharmaceutical companies and research institutions worldwide, with partners including international pharmaceutical giants such as Pfizer, Johnson & Johnson, and Merck KGaA.

However, in terms of profitability, XtalPi has been incurring continuous losses. From 2021 to 2023, XtalPi's revenues were RMB 63 million, RMB 133 million, and RMB 174 million, respectively, with a compound annual growth rate of 66.7%. The company's losses amounted to RMB 2.137 billion, RMB 1.439 billion, and RMB 1.906 billion, respectively.

XtalPi's R&D investments over the three years were 214 million yuan, 359 million yuan, and 480 million yuan, accounting for 52.4%, 53.5%, and 49.8% of the total expenditures in the respective years. The prospectus shows that the increase in R&D expenses in 2022 and 2023 was related to new laboratories and an increase in personnel.

XtalPi mainly relies on word-of-mouth marketing based on its past achievements, which has also led to a relatively high proportion of sales and marketing expenses, reaching 27.4 million yuan, 40.4 million yuan, and 62.5 million yuan from 2021 to 2023, respectively. During these three years, XtalPi's debts were 7.834 billion yuan, 9.45 billion yuan, and 11.036 billion yuan, respectively. As of April 30 this year, the total debt reached 10.951 billion yuan. These debts mainly include bank loans, lease liabilities, and convertible redeemable preferred shares.

Currently, XtalPi's business has covered the entire process of drug discovery, accumulating substantial research experience in the pharmaceutical applications of AI and quantum physics, which helps it seize the market opportunities in AI-driven drug development.

However, judging from its revenue situation, AI pharmaceuticals have not yet formed large-scale commercial applications. XtalPi's path to going public will pose a more stringent test for its future revenue-generating capabilities, which is also a key issue the company urgently needs to address.

References:

1. Zhi Dongxi. $20 Billion! The First AI Pharmaceutical Stock Born in Shenzhen, Held by Tencent.

2. Pharma Finance. Witnessing History: XtalPi's Market Value Reaches 50 Billion, Surpassing Wuxi Biologics

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