XLV - Tempering Positive Sentiment Of AI In Biotech
2025-01-16 06:03:56 ET
Summary
- Positive expectations for biotech AI success should be tempered.
- AI optimizes existing knowledge but doesn't expedite drug approval or reduce costs compared to traditional methods.
- Be wary that once trials are commenced, the risks will remain similar.
- However, advancements in improving data quality may change this with time.
The AI Marketing Ploy
Despite allowing for companies to raise billions in funding, I believe AI expectations should be tempered for the biotech industry. AI has been a leading cause of positive sentiment in the biotech industry over the past three to five years due to the rise of AI-aided drug discoverers, the success of Google ( GOOG )( GOOGL ) DeepMind’s AlphaFold, and the broader uptake of AI in business operations. The good is that this has allowed small biotechs to earn large amounts of funding. The bad is that AI, especially for drug discovery, will not be as influential as the investor presentations make it seem. There is no groundbreaking outperformance available to biotechs that use AI. This has not stopped the industry though , with Eli Lilly ( LLY ) and Novartis ( NVS ) partnering with Deep Mind’s Isomorphic Labs, or Amgen’s ( AMGN ) development of their own open-source platform, AMPLIFY....
Tempering Positive Sentiment Of AI In Biotech