AI that aims to discover drugs: Analysts predict a promising future for it
The combination of two of today's hottest topics, artificial intelligence and drug development, carries both promise and fraud at the same time. The promise because developing a new drug today takes over ten years, swallows billions of dollars, and in the vast majority of cases still ends in failure. If artificial intelligence could speed up and cheapen this lengthy and costly process, it would rewrite the rules of the entire pharmaceutical industry. And the company that managed it first would earn a fortune for its shareholders.
Key points
Analysts see potential upside of over 116% in the stock (target around $7.22), yet it trades around $3 near its lows.
In 13 years of existence, the company has not brought a single drug to market, even though its founder once promised 100 drugs in ten years.
It burns around $375 million in cash annually and its revenue is still negligible (just under $8 million per quarter).
Its platform is being validated by giants like Roche and Sanofi with contracts worth up to $20 billion. That is the main evidence that it can do something.
One cancer drug was designed by its artificial intelligence in just 10 months. The traditional path would take years.
We will talk about one of the loudest attempts to fulfill this vision. The company built giant automated laboratories, supercomputers, collected one of the largest collections of biological data in the world, and its technology is being validated with their own money by the biggest players in the field. Analysts see potential for doubling, or more. On paper, a fulfilled dream of a technology investor.
But the stock is huddled near historic lows, and the company burns hundreds of millions of dollars year after year without having brought a single drug to market to date. It has not fulfilled its own grandiose promise in thirteen years. That is the whole dilemma: either we are on the threshold of a revolution in medicine that the market has not yet understood, or it is an expensive dream that burns investor money faster than it can deliver results. The truth is that there is no clear answer.
No one disputes that the vision is appealing. The question is different: can this particular company turn its scientific promise into real, approved drugs and profit before it runs out of money? And does the high potential that analysts talk about justify the risk that an investor buys with it? The answer, along with a detailed analysis, valuation, and scenarios, we discuss in the paid section.