ChatGPT Sparks Renewed Interest in AI-Driven Drug Discovery; Eterna Therapeutics Chairman Du Tao Highlights Opportunities in Late-Stage Clinical Services

With the meteoric rise of ChatGPT, AI-driven drug discovery has once again become a hot favorite in pharmaceutical investment.

A research report by Soochow Securities points out that ChatGPT is catalyzing further development in medical AI, with a positive outlook on application areas such as AI-driven drug discovery and pathological diagnosis. The application of AI technology in the healthcare sector mainly encompasses medical imaging, clinical decision support, precision medicine, health management, healthcare informatics, and drug R&D. It is widely used in auxiliary and data-centric roles to enhance efficiency. Taking AI-driven drug discovery as an example, compared to traditional drug development processes, AI can significantly shorten the R&D cycle (some studies indicate an average reduction of 1/2 to 2/3), while simultaneously improving the success rate of drug development and return on investment.

“ChatGPT cannot yet play a direct role in clinical trials of innovative medicines, but it serves as at least an important information assistant for pharmaceutical R&D professionals. We have also tested ChatGPT, and its responses are highly informative and logical. Therefore, ChatGPT can be very helpful to pharmaceutical R&D personnel in information gathering,” said Du Tao, Vice Chairman of the International Innovative Drug Regulatory Professional Committee under the China Pharmaceutical Innovation and Promotion Association (CPIPA) and Chairman of Shenzhen Eaglet Pharma, in an interview with Time Finance during the 7th China Pharmaceutical Innovation and Investment Conference.

The resurgence of the AI-driven drug discovery concept has also ushered in a turning point for the fortunes of related companies.

XtalPi, a leading Chinese AI-driven drug discovery company, has recently appeared on the list of potential applicants for listing under Chapter 18C of the Hong Kong Stock Exchange. XtalPi is a drug R&D technology company driven by intelligence and automation, providing integrated drug discovery solutions to global biopharmaceutical enterprises. In 2021, there were reports that XtalPi planned to list in the United States, but the plan ultimately did not materialize.

Chapter 18C is a trading segment established by the Hong Kong Stock Exchange to attract specialized and innovative companies with high growth potential that do not yet meet the main board listing requirements. The initial list of potential applicants comprised only 11 companies, with XtalPi being one of them.

Statistics from E-Pharma Manager show that during the period from October 2021 to September 2022, a total of 41 financing and investment events occurred in the AI drug discovery sector. Excluding three cases where the funding amounts were not disclosed, the total financing exceeded RMB 6.05 billion.

As the ChatGPT concept gains popularity, several listed pharmaceutical companies, including Fosun Pharma (600196.SH, 02196.HK), HitGen (688222.SH), Haoyuan Chemexpress (688131.SH), Pharmablock Sciences (300725.SZ), and Hongbo Medicine (301230.SZ), have disclosed the progress of their AI technology projects.

Wu Yifang, Chairman of Fosun Pharma, stated at a recent earnings conference that the company will advance its AI-driven drug development business in three key areas: innovative drug target discovery and drug design, precision medicine, and intelligent surgery. Fosun Pharma has been strategically positioned in this field for over five years, with AI-driven drug development spanning five major domains, including ultrasound imaging, drug discovery, and precision medicine. The company has also incubated several subsidiaries, such as Xingmai Technology and XinTai Technology.

Chengdu HitGen also disclosed on the investor interaction platform that the results of its first-phase collaboration with Tencent AI Lab have been published in ACS Omega. The two parties jointly own an AI-based molecular scaffold hopping system. This algorithm is expected to accelerate the small-molecule design phase in drug discovery and development, thereby reducing labor and time costs.

“The company believes that the entire field of AI-driven drug discovery will maintain a long-term upward trend in the future, but its development speed and phased outcomes require calm analysis to avoid short-term blind overheating,” stated Chengdu HitGen.

Founded by Du Tao in 2019, Eglin Pharma is an innovative drug developer centered on end-to-end AI technology. The company currently has 10 R&D pipelines, five of which have entered the clinical trial stage.

However, AI is not a panacea; many questions remain to be answered regarding how it will transform the pharmaceutical industry.

Du Tao pointed out that while AI cannot directly produce drugs, it can provide support and empowerment for drug research and development (R&D). The empowering role of AI in drug R&D can be broadly divided into three stages: the molecular/target stage, the pharmaceutical biology stage, and the clinical stage. Currently, the external service capabilities of China’s AI-driven pharmaceutical companies are mostly concentrated at the front end, namely the molecular/target stage. However, in reality, the back-end clinical stage is the phase in pharmaceutical R&D that demands the most time and capital.

It is precisely for this reason that Eglin Pharma has chosen to focus on AI-enabled technologies in the clinical stage. “We recognized that competition in front-end services in China has become extremely intense. The most costly phase of pharmaceutical R&D is the later-stage clinical development. By leveraging AI applications to accelerate clinical trial processes, shorten the duration of clinical studies, and reduce the risk of clinical failure, we can achieve greater economic benefits,” stated Du Tao.

To date, no new drug discovered and designed using AI technology has received marketing approval. However, with continuous capital infusion and technological upgrades and iterations, the AI-driven drug discovery industry is poised for new growth opportunities. According to the "In-Depth Industry Report on AI Drug Discovery," the market size of China’s AI drug discovery sector was RMB 2.7 billion in 2022 and is projected to reach RMB 204 billion by 2035.