XtalPi Raises HK$2.1 Billion Amid DeepSeek's Disruption in AI Drug Discovery

DeepSeek has also made a splash in the AI pharmaceuticals field.

Image Source: Tuchong Creativity

China's "First AI Drug Development Stock" XtalPi Holdings Limited (02228.HK, hereinafter referred to as "XtalPi") announced on February 19 that the company had signed a placement agreement with the placement agent. According to the agreement, the company will issue shares under the general mandate, and the placement agent will act as the company’s agent to sell up to 342 million shares, representing approximately 9.31% of the company's existing issued share capital and about 8.52% after completion. The price of the placement shares is HK$6.10 per share, a discount of 5.86% compared to the closing price on February 18. Upon completion, the total proceeds from the placement are expected to reach HK$2.088 billion.

This is the second placement financing initiated by XtalPi within the recent month.

On January 19, XtalPi announced the placement of 264 million shares at a price of HK$4.28 per share. The placement was completed as announced on January 24, with total proceeds amounting to HK$1.13 billion. After deducting related expenses, the net proceeds were approximately HK$1.125 billion.

Dr. Shuhaotian Wen, co-founder and chairman of XtalPi, told Times Finance: "We are facing changes in the external environment as well as progress in internal business, and we are also thinking about the upgrade of AI application logic. To promote more business development, we need greater capital support, and more data is required to accelerate the emergence of super artificial intelligence in the industry."

Wen Shuhao told the Times Finance that the funds raised recently will be mainly used for XtalPi's application in the artificial intelligence field. With the support of funds, the company can expand more industrial applications. Based on massive data and strong reasoning capabilities, XtalPi is confident in becoming a super artificial intelligence enterprise in the biomedicine and materials fields in the future.

Just after XtalPi completed its previous round of placement fundraising, a major event occurred in the artificial intelligence industry.

On January 20, DeepSeek officially released and open-sourced its latest R1 inference model. Just a few days later, it quickly topped the free app download charts in both the Chinese and U.S. Apple Stores, causing a stir in the artificial intelligence industry, with ripples spreading across various sectors.

The sensation caused by DeepSeek has also drawn the attention of XtalPi.

"First, DeepSeek has reduced the cost of computing power. Secondly, open-source AI technology provides more possibilities for the development of AI from the perspectives of algorithms and computing power, making the application of artificial intelligence particularly important, especially in improving data quality in application scenarios and deepening data comprehension. In the fields of biomedicine and materials science, understanding and mastering data are crucial, and we see tremendous opportunities there," Wen Shuhao told Era Finance.

XtalPi was founded in 2015 as an innovative R&D platform based on quantum physics, empowered by artificial intelligence, and driven by robotics. Its customer base covers multiple industries, including biopharmaceuticals, materials science (such as agricultural technology, energy, new chemicals, and cosmetics).

In June 2024, XtalPi officially went public on the Hong Kong Stock Exchange, with an initial public offering price of HK$5.28 per share, raising approximately HK$896 million in net proceeds. It is the first specialized technology enterprise to be listed under the Hong Kong Stock Exchange's Rule 18C.

In biopharmaceuticals, XtalPi mainly provides customers with two major businesses: drug discovery solutions and intelligent automation solutions. According to Frost & Sullivan, XtalPi's clients already include 16 of the top 20 biotechnology and pharmaceutical companies globally (ranked by revenue in 2022), making it one of the most commercially mature AI-driven pharmaceutical enterprises in China. The application of artificial intelligence technology can significantly shorten the drug R&D cycle and reduce R&D costs. For instance, it can cut down the prediction time for drug crystalline forms from at least several months or years to just a few months or weeks.

In the latest placement announcement, XtalPi also noted that shortly after the completion of the previous placement, DeepSeek launched an AI chatbot at a highly competitive cost, achieving astonishing breakthroughs. By implementing powerful open-source AI models, DeepSeek has lowered the barriers to AI development, enabling more researchers, startups, and organizations to build and deploy AI, thereby bringing unprecedented market sentiment and a positive outlook to the AI industry.

Catalyzed by the DeepSeek surge, several AI concept-related medical stocks hit new one-year highs after the Chinese New Year. On February 21, XtalPi closed at HKD 8.47 per share, with an increase of over 40% since the beginning of the year.

XtalPi is currently still in the unprofitable stage. Financial report data shows that in the first half of 2024, XtalPi's net loss was 1.237 billion yuan, with the loss amount increasing by 101.80% year-on-year. According to the recently released earnings forecast, XtalPi expects that its revenue generated in 2024 from providing drug discovery solutions and intelligent automation solutions has reached the income threshold for commercialized companies, which is HK$250 million. XtalPi attributes the growth in revenue to the development of the company’s business and market opportunities.

Standing at the forefront, XtalPi has also attracted more attention.

On February 8, 2025, Xia Baolong, Director of the Central Hong Kong and Macao Affairs Office and Director of the State Council's Hong Kong and Macao Affairs Office, visited XtalPi, toured XtalPi’s AI + Robotics Lab, and learned about XtalPi’s progress in promoting cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area and building new quality productive forces in automation and intelligence.

On February 19, XtalPi announced that the company and Guangdong Hengjian Investment Holding Co., Ltd. ("Hengjian Holdings") are actively promoting the implementation of the "Artificial Intelligence+" technology and industry integration innovation consortium project. Established in 2007, Hengjian Holdings is a major strategic investment platform of the provincial Party committee and government, as well as a provincial state-owned capital operation company. The project aims to respond to the national "innovation consortium" strategy, relying on "AI + robot automation" technology, and uniting multi-party capital resources and advanced companies up and down the industrial chain. It seeks to build world-leading R&D innovation infrastructure and an industry incubation ecosystem, promote the cluster development of strategic industries, and accelerate the digital and intelligent transformation of related industries in the Guangdong-Hong Kong-Macao Greater Bay Area and globally. The initiative will also help the Greater Bay Area create world-class artificial intelligence research infrastructure and lead the future development of AI pharmaceuticals, new materials, new energy, robotics, and other industries.

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