As China embraces AI, only 24% of US pharma execs bet on it for drug-making
Pharmaceutical companies have embraced artificial intelligence in drug research almost universally, yet few company executives expect AI to actually make drugs succeed, according to a Citi survey released on Tuesday. “The biggest risk to the AI-powered drug discovery thesis is not that AI fails to accelerate discovery,” said John Yung, head of Asia healthcare research at the US investment bank.…
Citi's latest survey reveals that while Chinese pharmaceutical executives are optimistic about artificial intelligence's potential in drug research, they remain cautious about its ability to significantly improve drug success rates. Only 24% of the 50 US-based executives polled expect AI to deliver a substantial increase in drug success probability, with the remaining 56% anticipating only a moderate improvement.
The survey suggests that human biology, clinical judgment, and execution will continue to be key bottlenecks, regardless of AI deployment levels.
John Yung, head of Asia healthcare research at Citi, emphasized that the primary risk associated with AI in drug discovery is not its failure to accelerate the process, but rather the lack of translating that speed into successful drugs and higher probabilities of success. Yung further explained that it's only when AI-driven acceleration leads to better drugs and increased patient benefits that companies can truly profit from this technology.
The survey also highlighted that executives see the greatest near-term benefits of AI in early-stage drug discovery, particularly in target identification and validation, followed by lead optimization, hit identification, and screening. Most respondents anticipate double-digit budget increases for AI-related R&D spending over the next year.
Chinese pharmaceutical companies appear to be more successful than their US counterparts in integrating AI into their operations. Companies like Shanghai-listed HitGen and Hong Kong-listed Xtalpi have already turned profitable, with Citi predicting that their earnings will accelerate as robust demand leads to stronger utilization and operating leverage.
However, despite the positive outlook, Chinese AI drug discovery companies are currently trading at a lower valuation compared to their US counterparts, with a median price-to-sales ratio of 19 times projected 2026 sales, significantly lower than the 93 times commanded by US peers.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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