Dealmakers back AI drug discovery boom
AI drug discovery and development companies have emerged as one of the hottest areas of the wide-ranging life sciences industry.
Why it matters: As AI-focused biotechs proliferate, VC investors and M&A bankers are eyeing opportunities.
The big picture: Generative AI’s promise to cut drug development timelines and costs appeals to pharma, which is staring down rising production costs, competition from China and changing public policy.
By the numbers: VC investment in AI-enabled health care and life sciences companies has surged since 2020, per PitchBook.
- While investment activity peaked in 2021 at $22 billion, it still grew year-over-year to $10.5 billion invested across 511 deals in 2024.
- Some of this year’s largest deals include Google’s Isomorphic Labs, which raised $600 million in March, and Pathos AI, which raised $365 million at a $1.6 billion valuation in May.
- Genesis Therapeutics is working with AI companies like Nvidia to harness AI to develop oncology and autoimmune treatments in house, as well as with pharma partners.
- “Through our partnerships, we can cast a much wider net, both in just the volume of diseases and drug targets we can work on, but also the therapeutic areas as well,” says Genesis founder and CEO Evan Feinberg.
