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AI Startups fill the Niches for Drug Discovery

Few industries are as large and under as much regulatory pressure as the pharmaceutical sector of the healthcare and life sciences industry. However, the trillion-dollar industry is facing a public relations and political backlash over the high cost of drugs [1,2]. According to a 2016 study out of the Tufts Center for the Study of Drug Development, with the cost to bring a drug to market estimated to be more than $1 billion [3], it seems likely that without a paradigm shift, these costs will continue to rise.

In my book, MoneyBall Medicine: Thriving in the New Data-Driven Healthcare Market, I described how data analytics and new technologies, such as artificial intelligence (AI), are revolutionizing the healthcare landscape. Digitizing vast amounts of information, standardizing technological frameworks like FHIR, and breaking down data silos is driving this change. But the pharmaceutical industry remains, largely, tied to a rigid regulatory framework it has little control over, and a timeline that can reach more than a decade between the initial pre-clinical studies and final FDA approval [4]. At each step of the drug development process, from the screening of molecules to the clinical trials, there is significant opportunity to streamline, reduce costs, and generally make the process more agile.

Some Big Pharma companies are starting to use technology, like computational modeling and high-throughput molecular screening to identify new drug targets or for drug repurposing, to do just that. Others have begun to partner with and/or acquire the intellectual property of startups that focused on the specific stages of the drug development process. Roche, for example, is partnering with Ionis Pharmaceuticals to further development of an RNA-targeting drug for eye diseases [5]. Ionis previously brought their compound through Phase I trials, so Roche’s partnership with Ionis mitigates some of the risk Roche has in the drug development process, while giving Ionis the opportunity for funding for hitting certain development milestones and tiered royalties if the drug is eventually brought to market.

Beyond simply partnering with other companies or acquiring their IP to improve the drug development process, artificial intelligence-based platforms are reinventing how Pharma tackles some of its biggest problems. For example, out of thousands of molecules that might be screened, only a few (or none) will ultimately make it completely through the pipeline; the failures, which are considered just a part of the process, are costly and take time—a perfect target for innovation. twoXAR, an AI-driven drug development company, uses computational models to help take human bias (and potential failures) out of prioritizing which candidates to take further.

Clinical trials are another area ripe for disruption. Multiple companies are working on this problem, like Deep6.AI, from figuring out which clinical trials are likely to be successful before the study sites are even underway, to matching patients with existing clinical trials, which drives not only the science further, but also helps patients. Because these companies are not locked into the standard drug development pipeline, they can take on specific components of the process, rather than the entire thing. This nimbleness and niche-oriented focus is a competitive advantage, and leveraging the power of data and AI technology is taking away some of their risk.

In this special MoneyBall Medicine Podcast Seriesfrom the AI Applications Summit, I speak with Andrew Radin, co-founder and CEO of twoXAR, Ron Alfa, Vice President of Discovery and Product at Recursion Pharma, Guido Lanza, President and CEO of Numerate,Wout Brusselaers, CEO and founder of Deep6.AI,  Shrujal Baxi, medical director of Flatiron Health, and Milind Kamkolkar, Chief Data Officer at Sanofi. We discuss a variety of topics, from finding talent to new business models and their predictions for where AI is leading us. Join me for this MoneyBall Medicine Podcast AI Summit Series!

  1. Keshavan, M. 2016. The backlash over high drug prices is hitting pharma where it hurts. STAT. https://www.statnews.com/2016/11/03/drug-prices-backlash-pharma/
  2. Facher, L. 2018. New ads push lawmakers to keep the drug pricing promises they made on the campaign trail. STAT. https://www.statnews.com/2018/11/13/new-ads-push-lawmakers-to-keep-the-drug-pricing-promises-they-made-on-the-campaign-trail/
  3. DiMasi, J. A., Grabowski, H. G. and Hansen, R. W. 2016.Innovation in the pharmaceutical industry: New estimates of R&D costs. J Health Econ 47 20-33.
  4. S. Food and Drug Administration. 2016New Drug Development and Review Process. https://www.fda.gov/Drugs/DevelopmentApprovalProcess/SmallBusinessAssistance/ucm053131.htm
  5. Pharmaceutical Technology 2018. Ionis partners with Roche to advance new antisense drug. Pharmaceutical Technology. https://www.pharmaceutical-technology.com/news/ionis-pharmaceuticals-roche-allaince/