SPECIAL REPORT The Top 7 Stocks for 2024

Biotech Breakthroughs: 3 Companies on the Cusp of Major Discoveries


  • Here are just a few of the top biotech stocks that could be on the cusp of major discoveries.
  • Schrodinger (SDGR): SDGR’s platform extensively utilizes AI.
  • Bristol-Myers Squibb (BMY): The pharmaceutical firm partnered with Schrodinger.
  • Exscientia (EXAI): EXAI  has an AI-powered drug-discovery platform, and is partnering with pharmaceutical firms.
biotech stocks - Biotech Breakthroughs: 3 Companies on the Cusp of Major Discoveries

Source: everything possible / Shutterstock.com

Artificial intelligence is changing the drug-discovery process by making it much faster and cheaper.  Traditionally, most biotech stock drug candidates fail. Indeed, according to Nature, “An estimated 86% of drug candidates developed between 2000 and 2015 did not meet their stated endpoints.” And the well-respected consulting firm McKinsey reported that “Today, to discover and develop a drug takes more than ten years.” Meanwhile, AI can cut that same time frame down to just one year. That being said, investors may want to pay close attention to these top three biotech stocks to buy and hold.

Biotech Stocks: Schrodinger (SDGR)

a visual representation of the data underlying an artificial intelligence (AI) powered solution. BBAI stock
Source: Shutterstock

Schrodinger (NASDAQ:SDGR) uses artificial intelligence, physics, and software to speed up the drug discovery process. In addition, SDGR’s system also significantly increases the chances of selecting molecules that will ultimately become successful treatments. With that, a good number of companies are already using that AI software to identify which molecules will work best together to create a successful drug.

Even better, the company is conducting a Phase I trial of one of its own MALT 1 inhibitors, SGR-1505, which, if successful, could help treat “several non-Hodgkin’s B-cell lymphomas, including activated B cell-like diffuse large B cell lymphoma (ABC-DLBCL), mantle cell lymphoma, and chronic lymphocytic leukemia,” as noted on the company’s site.

Bristol-Myers Squibb (BMY)

Bristol-Myers (BMY) logo at the top of a cellphone.
Source: Piotr Swat / Shutterstock.com

As I noted in a June column,Bristol Myers-Squibb (NYSE:BMY) has formed a comprehensive partnership with Schrodinger… to leverage (its) physics and AI-based technology for accelerated drug discovery.”

BMY agreed to collaborate with SDGR on the development of treatments for neurological diseases. The two companies had already been working on creating drugs for oncology and immunology illnesses. Given BMY’s extensive partnership with SDGR and my belief in the tremendous power of AI, I’m upbeat about BMY’s longer-term outlook.

Also noteworthy is that BMY’s cancer treatment, Opdivo, continues to show efficacy in more types of cancer. Even better, the European Union (EU) recently approved Opdivo as a treatment for melanoma. In addition, the drug recently met its two endpoints in a Phase 3 trial that evaluated its effectiveness as “a first-line option for patients with bladder cancer.”

Exscientia (EXAI)

blue graphic of person's face made of binary code and microchip lines to depict artificial intelligence/AI. Best Value AI Stocks
Source: shutterstock.com/Peshkova

Like Schrodinger, Exscientia (NASDAQ:EXAI) uses AI to make the drug-discovery process cheaper, faster, and more efficient.

Validating EXAI’s technology, the company has developed one drug that entered clinical trials in partnership with Bristol-Myers and another that entered clinical trials in partnership with a large Japanese drug maker, Sumitomo. Moreover, last month, EXAI, along with its partner, China’s  GT Apeiron, enrolled its initial patients in the Phase 1/2 trial of their potential cancer treatment. The trial will test the drug’s efficacy in multiple types of solid tumors.

On the date of publication, Larry Ramer was long SDGRThe opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/08/biotech-breakthroughs-3-companies-on-the-cusp-of-major-discoveries/.

©2024 InvestorPlace Media, LLC