The pace at which investors are funding artificial intelligence drug discovery companies is slowing down, but major acquisitions and partnerships are still underway.
In 2021, $100 million "mega-round" investments made up 70 percent of the funding to AI drug discovery companies. That percentage changed to 30 percent in 2022, and there has yet to be a mega-round investment in the industry thus far in 2023, according to a June 27 report from CBInsights.
Although the field is experiencing a decrease in funding, there have been prominent acquisitions and partnerships this year. BioNTech acquired a startup called InstaDeep in January for $682 million to integrate InstaDeep's AI features into its therapeutic platform. Eli Lilly entered a $250 million agreement with a startup called XtalPi in May to use its technology that helps discover potential drug candidates, according to the report.
Additionally, Recursion acquired two startups called Cyclica and Valence in May for a combined $87.5 million to use their AI capabilities to better predict and produce better outcomes for drug identification, according to a May 8 report from BiopharmaDive.
The slowdown in funding has not stopped companies from entering the AI drug discovery space, as big tech companies like Nvidia and Google DeepMind and over 200 startups are pursuing opportunities, according to the report.