The Best AI Pharmaceutical Stocks to Invest In 2024

Investors are buzzing about AI drug discovery stocks. Why? Because AI isn’t just a tool; it’s a game-changer!

AI is not only accelerating the pharmaceutical and drug discovery process but also improving the accuracy and efficacy of new treatments.

This shift has led to a surge of interest in AI drug discovery stocks, as investors seek to capitalize on the groundbreaking advancements in this field.

When you’re done reading this article, your knowledge bank should be filled with information on the key players, the benefits of AI in pharmaceuticals, and the top AI pharmaceutical stocks to watch.

The Role of AI in Drug Discovery

Accelerating Drug Discovery

Traditional drug discovery methods can take over a decade and cost billions of dollars. However, AI speeds up this process by analyzing vast amounts of data quickly and accurately. AI algorithms can also predict how different compounds will behave and identify potential drug candidates faster than traditional methods.

Enhancing Predictive Accuracy

AI models use machine learning to analyze data from clinical trials, genomic studies, and chemical databases to predict the efficacy and safety of new drug candidates. This improves the accuracy of predictions and reduces the likelihood of costly failures in later stages of development.

Personalized Medicine

AI makes it possible to develop personalized medicine by analyzing individual patient data to predict how they will respond to different treatments. Hence, this helps design more effective and tailored therapies, improve patient outcomes, and minimize side effects.

Identifying New Drug Targets

AI can sift through massive datasets to identify novel drug targets that traditional methods might have overlooked. So, by analyzing genetic information, protein structures, and disease pathways, AI can uncover new opportunities for drug development.

Optimizing Drug Design

Generative AI models can design new drug molecules with desired properties. AI can create novel compounds more likely to succeed in clinical trials, just by using algorithms that understand the relationship between molecular structure and biological activity

Improving Clinical Trials

AI can optimize clinical trial design and patient recruitment by predicting which patient populations will respond best to a new treatment. This leads to more efficient trials, faster approval times, and reduced costs.

10 AI Drug Discovery Stocks To Watch

Exscientia (NASDAQ: EXAI)

Exscientia is one of the leading AI pharmaceutical companies that uses its proprietary AI platforms to design and develop precision therapies. The company has had remarkable success, with 4 compounds already in early clinical stages and over 30 programs in total.

The company has collaborations with major pharmaceutical firms like Evotec, Bristol Myers Squibb, and GT Apeiron Therapeutics to advance its AI-powered drug discovery efforts

Exscientia has also secured $6.5 billion in revenues from milestones with partners, putting it in a strong financial position. The company’s focus on oncology and inflammatory diseases makes it an attractive investment. 

Key Innovations:

• Centaur Chemist™: A platform combining AI and human expertise.
• Automated Drug Design: AI-driven processes to design novel compounds.

Notable Achievements:

• First AI-designed Drug: Progressed to human clinical trials.
• Collaborations: Partnerships with GSK, Sanofi, and others.

Financial Snapshot:

• Market Cap: $460.83 million
• Revenue (2023): $3.1 million and $25.6 million for three and twelve months respectively
• Stock Performance: Strong growth driven by successful partnerships and pipeline advancements.

Schrödinger (NASDAQ: SDGR)

Schrödinger is a leading computational drug discovery platform that uses AI and physics-based simulations to help pharmaceutical and biotechnology companies discover and develop novel therapeutics.

The company operates in two segments – software and drug discovery. In its software segment, Schrödinger sells licenses to its physics-based platform to help other biopharma companies accelerate their own drug discovery efforts.

In its drug discovery segment, Schrödinger uses its AI and computational tools to advance its own pipeline of drug candidates, some of which have already reached clinical trials.

Though today the market looks down, Schrödinger’s shares rose over 80% in 2023, reflecting strong investor interest in its AI-powered approach to drug R&D. Chances are, it will still pick up!

Key Innovations:

• Physics-based Simulations: Schrödinger uses high-accuracy molecular modeling to predict drug efficacy.
• Collaborations: Notable partnerships with Bristol-Myers Squibb and Takeda.

Notable Achievements:

• IPO: Raised $232 million in its 2020 IPO.
• Pipeline: Several drugs in various stages of clinical trials.

Financial Snapshot:

• Market Cap: $1.38 billion
• Revenue (2023): $216.7 million
• Stock Performance: Significant growth potential with increasing R&D investments.

BenevolentAI (AMS: BAI)

BenevolentAI is a leading clinical-stage artificial intelligence (AI)-enabled drug discovery company. The company uses its proprietary Benevolent Platform™ to leverage vast amounts of biomedical data and AI/machine learning techniques to accelerate drug discovery and development.

BenevolentAI is a publicly traded pioneer in the field of AI-driven drug discovery, and its strong partnerships, validated platform, and growing pipeline make it an attractive investment opportunity in the AI drug discovery space.

Key Innovations:

• Benevolent Platform™: Integrates AI with biomedical data to identify novel drug targets.
• Collaborations: Working with AstraZeneca and Novartis on various therapeutic areas.

Notable Achievements:

• AI-designed Compounds: Several AI-designed compounds in clinical trials.
• Expansion: Acquired startup Proximagen to bolster its pipeline.

Financial Snapshot:

• Market Cap: 75.62 million EUR
• Revenue (2023): 7.3 million EUR
• Stock Performance: Steady growth with promising pipeline progress.

Absci Corporation (NASDAQ: ABSI)

Absci is a pioneer in AI-powered antibody design, with the ability to create new functional antibodies from scratch in just 6 weeks.

The company has established collaborations with major pharmaceutical firms like Merck and Astellas, as well as a partnership with Nvidia to improve its technology. Absci’s innovative approach and strong partnerships make it one of the most compelling AI pharmaceutical stocks. 

Key Innovations:

• Denovium Engine: AI-powered platform for protein design.
• Integrated Drug Creation: Combines biologics design with AI for rapid development.

Notable Achievements:

• IPO: Raised $200 million in 2021.
• Partnerships: Collaborations with leading biotech companies to accelerate biologic drug development.

Financial Snapshot:

• Market Cap: $330.20 million
• Revenue (2023): $5.7 million
• Stock Performance: Promising outlook due to innovative AI applications and expanding partnerships.

Arcutis Biotherapeutics (NASDAQ: ARQT)

Arcutis Biotherapeutics is a clinical-stage biopharmaceutical company that leverages AI and machine learning to develop novel therapies for dermatological conditions. The company’s lead product candidate, roflumilast, is currently in late-stage clinical trials for the treatment of plaque psoriasis and atopic dermatitis.

Arcutis’ focus on AI-powered drug discovery in the dermatology space makes it one of the interesting AI pharmaceutical stocks to consider. 

Key Innovations:

• AI-driven Research: Applies AI to identify and develop new therapeutic candidates.
• Focus: Specializes in non-steroidal treatments for chronic skin diseases.

Notable Achievements:

• FDA Approval: Received approval for Zoryve, a topical treatment for plaque psoriasis.
• Clinical Pipeline: Multiple candidates in advanced stages of development.

Financial Snapshot:

• Market Cap: $958.53 million
• Revenue (2023):$59.6 million
• Stock Performance: Strong growth driven by successful product launches and a robust pipeline.

Recursion Pharmaceuticals (NASDAQ: RXRX)

Recursion Pharmaceuticals is a clinical-stage biotechnology company that uses AI and automation to discover and develop drugs. The company has built a large pipeline of drug candidates, with all of its therapies currently in phase 1/2 trials or earlier stages.

Recursion’s AI-powered platform allows it to rapidly screen thousands of drugs and drug-like molecules to identify promising candidates for further development.

While Recursion’s therapies are still a long way from reaching the market, the company’s extensive pipeline and innovative approach make it an interesting AI drug discovery stock to watch.

Key Innovations:

• Recursion OS: Combines AI, automation, and experimental biology.
• Expansive Pipeline: Over 30 programs targeting various diseases.

Notable Achievements:

• IPO: Raised roughly $500 million in its 2021 IPO.
• Strategic Partnerships: Collaborations with Bayer and Takeda.

Financial Snapshot:

• Market Cap: $2.7 billion
• Revenue (2023): $43.87 million
• Stock Performance: Positive outlook due to extensive pipeline and high-profile partnerships.

AbCellera Biologics Inc. (NASDAQ: ABCL)

AbCellera Biologics Inc. (ABCL) is one of the top AI pharmaceutical companies that specializes in the discovery and development of antibody medicines using artificial intelligence (AI) and machine learning.

The company was founded in 2012 and has a strong financial position with a total cash position of $787.9 million in liquidity. AbCellera has partnerships with several major pharmaceutical companies, including Regeneron, Moderna, Eli Lilly, and Novartis, among others.

Despite a revenue drop in 2023 due to the completion of the pandemic response, AbCellera’s financial position remains strong. The company’s relatively low cash multiple of 1.8 and P/B ratio of 1.2 indicate an undervalued position in the sector. With a cash runway of 6.75 years, AbCellera has ample time to start receiving payouts from successful partnerships.

Key Innovations:

• AI-driven Discovery: Leveraging machine learning to analyze and predict antibody interactions.
• High-Throughput Screening: Rapid screening of millions of antibodies for potential drug candidates.

Notable Achievements:

• COVID-19 Response: Partnered with Eli Lilly to develop bamlanivimab, a COVID-19 therapeutic.
• Pipeline: Multiple antibodies in clinical trials for various diseases.

Financial Snapshot:

• Market Cap: $864.52 million
• Revenue (2023): $38.0 million
• Stock Performance: Strong growth driven by successful antibody discoveries and strategic partnerships.

Insilico Medicine

Insilico Medicine is one of the top AI pharmaceutical companies using AI for every step of the pharmaceutical research and development process, from target discovery to clinical trial design. The company’s integrated drug discovery suite, Pharma.AI, includes tools for target identification, molecule generation, and clinical trial prediction.

In a significant milestone, Insilico’s drug candidate for idiopathic pulmonary fibrosis became the first entirely AI-discovered and AI-designed drug to enter a phase 2 clinical trial.

Though it’s still a privately held company and cannot be accessed on major public exchanges just yet, It’s one company you should have your eyes on for future investments.

Key Innovations:

• PANDAOmics: AI platform for target discovery.
• Chemistry42: AI-powered generative chemistry platform.

Notable Achievements:

• AI-designed Drug: First AI-discovered drug for idiopathic pulmonary fibrosis entered clinical trials.
• Collaborations: Partnered with major pharmaceutical companies to enhance drug discovery.

Financial Snapshot:

• Market Cap: $51.18 million
• Revenue (2023): $45 million
• Stock Performance: Strong potential driven by groundbreaking AI applications and strategic partnerships.

Molecule One (NASDAQ: MOLN)

Molecule One is a Polish startup using machine learning to streamline the chemical synthesis process for drug discovery. The company’s technology aims to predict the best chemical reactions and pathways to efficiently produce drug candidates, reducing the time and cost of this crucial step.

Molecule One has attracted attention from investors and collaborators for its innovative approach to tackling a key bottleneck in the drug development pipeline. While not publicly traded, Molecule One represents one of the AI drug discovery stocks to watch out for.

Key Innovations:

• AI-driven Synthesis: Platform for designing and synthesizing drug candidates.
• Cloud-based Solutions: Offers scalable AI tools for pharmaceutical research.

Notable Achievements:

• Partnerships: Collaborations with top pharmaceutical companies to enhance drug synthesis.
• Technology: Recognized for innovative approaches in molecule synthesis.

Financial Snapshot:

• Market Cap: $0.15 Billion
• Revenue (2023): $7.8 million 
• Stock Performance: Positive growth potential with strong technological foundations and industry partnerships.

Atomwise

Atomwise is a private AI drug discovery company that uses deep learning to identify and optimize small-molecule drug candidates. Its proprietary “AtomNet” platform can rapidly screen billions of molecules to find promising leads for drug development.

Atomwise has formed partnerships with major pharmaceutical companies like Bayer, Eli Lilly, and Sanofi to leverage its AI technology. The company has also advanced several of its own drug candidates into preclinical and clinical development.

As a private company, Atomwise is not publicly traded, but it represents a leading player in the AI-powered drug discovery space that could potentially go public in the future.

Key Innovations:

• AtomNet®: AI-driven platform for rapid drug discovery.
• Global Reach: Over 700 collaborations worldwide.

Notable Achievements:

• Funding: Raised $123 million in Series B funding.
• Discovery: Identified multiple promising drug candidates.

Financial Snapshot:

• Market Cap: $492 million
• Revenue (2023): $5.7 million
• Stock Performance: Solid prospects due to extensive research collaborations.

The Bottom Line

Clearly, investing in AI-driven drug discovery stocks offers significant opportunities as these companies redefine pharmaceutical R&D.

With innovative technologies and strategic collaborations, these top AI drug discovery stocks are well-positioned to shape the future of medicine, offering potential investors a promising avenue for growth and innovation.

Here’s to a future where we can make good money from cutting-edge technology and groundbreaking medical discoveries!

FAQs

1. What are the top 3 AI stocks to buy now?

1. NVIDIA Corporation (NVDA)
2. Alphabet Inc. (GOOGL)
3. Microsoft Corporation (MSFT)

2. Which pharma stock is powered by AI?

Exscientia PLC (EXAI) is a notable pharma stock heavily powered by AI for drug discovery.

3. Which drug discovery company uses AI?

Insilico Medicine uses AI extensively in its drug discovery processes.

4. What are the future prospects of AI in drug discovery?

AI in drug discovery has a bright future, with the potential to significantly speed up the development of new drugs, reduce costs, and improve the precision and efficacy of treatments.