A Review of Seven AI Drug Discovery Stocks

In the dot-com days, everyone launched a website and became a “dot com company.” Today’s equivalent is peppering your investor deck with mentions of generative AI and large language models (LLMs). For retail investors, this means contending with financial pundits who now spin every company with a chatbot as “AI-enabled.” We’re fortunate enough to have been following AI stocks before there were AI stocks, so we can more easily distinguish between hype or substance. One area that’s been a focus for AI investors for a while now is AI drug discovery.

The thesis speaks for itself. If AI algorithms can best the world’s most elite Go player, then turn around and master protein folding shortly afterwards, it’s realistic to think we might use these same algos to make the broken drug discovery process more efficient. So, a handful of companies started building AI platforms that digest large amounts of big data and spit out drug candidates that have better safety and efficacy characteristics than what might have been produced using traditional methods. Today, we’re going to take a brief look at each while considering key metrics such as:

  • Size – Bigger is better as raising capital becomes easier and the likelihood of trading on a major exchange (where there’s liquidity) increases.
  • Pipeline progress – Developers often receive revenues upfront from pharma companies when they start collaborating, but the bulk of potential lies in downstream milestones and royalties.
  • Runway – Cash on hand divided by some estimated burn rate number tells us how soon a firm might have to give away more equity or take on m

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