AI-powered Drug Discovery Market

AI-powered Drug Discovery Market Outlook 2032

 The global AI-powered drug discovery market size was USD 1.62 Billion in 2023 and is projected to reach USD 21 Billion by 2032, expanding at a CAGR of 30.5% during 2024–2032. The rising need for innovative drug therapies and the expansion of manufacturing capabilities within the life science sector is fueling the market.

The AI-powered drug discovery market encompasses a surge in investment and research initiatives, driven by advancements in AI algorithms, computational power, and data availability. AI has revolutionized the drug discovery process by enhancing target identification and validation, optimizing lead compound selection, and facilitating personalized medicine approaches. Collaborations between pharmaceutical companies, biotech firms, and AI startups are fostering innovation and the development of novel therapeutics.

Regulatory agencies are adapting by providing guidance on AI applications in drug discovery, ensuring safety, efficacy, and compliance. Furthermore, the integration of multi-omics data and machine learning techniques is enabling predictive modeling for drug response and toxicity assessment, thereby transforming the field of AI-powered drug discovery.

• In March 2024, AION Labs introduced CombinAble.AI to revolutionize antibody design with AI. It tackles the complexities of antibody design to amplify and expedite the creation of enhanced therapeutic solutions.
  

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AI-powered Drug Discovery Market Dynamics

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Major Drivers

The proliferation of diverse options, including data mining and personalized capabilities, in AI solutions within drug discovery processes is propelling the market. Furthermore, high precision is attained in drug discovery by integrating deep learning and machine learning algorithms into AI platforms to discern the binding properties of drug molecules. The integration of cutting-edge technologies such as electronic data capture (EDC) assists manufacturers in enhancing patient data management and reducing monitoring expenses.

Integration of electronic clinical outcome assessment (e-COA) into AI solutions helps in minimizing process errors. Recently, advanced analytics have been incorporated into these sophisticated AI solutions, supporting stakeholders in activities such as data mining, patient recruitment, and management of medical and clinical records. Furthermore, the rising focus on precision medicines is expected to boost the market during the projected period.

Existing Restraints

The lack of standardization presents obstacles to efficient communication and workflow, potentially restricting the scalability and widespread adoption of AI solutions within the biotech industry. The lack of standardized protocols across various AI platforms and tools presents challenges, impeding the smooth integration of different technologies, and thereby hindering interoperability of existing platforms. Data sharing, consistency, and compatibility across diverse AI applications in drug discovery become complex without universally accepted protocol.

Emerging Opportunities

Increasing integration of AI into drug discovery processes creates immense opportunities in the market. Integration of AI into drug discovery processes fosters collaborations between pharmaceutical companies, biotech firms, academic institutions, and technology providers. These partnerships leverage complementary expertise and resources to accelerate innovation and bring new therapies to market. Moreover, AI-driven approaches identify new applications for existing drugs by analyzing their molecular properties and biological effects. This presents opportunities for repurposing drugs to treat different diseases, potentially saving time and resources in drug development.

Scope of the AI-powered Drug Discovery Market Report

 The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics are included in the report. 

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AI-powered Drug Discovery Market Segment Analysis

Component Analysis

On the basis of component, the global market is trifurcated into software, hardware, and services. The software segment accounted for 62% market share in 2023 and is projected to register a significant growth rate during the assessment years, owing to the rising need for advanced analytics and machine learning tools within the pharmaceutical industry. Additionally, AI software improves efficiency and automates various stages of the drug discovery process, leading to reduced time and resource needs. Growing requirements to reduce the time required for drug development are boosting the adoption of AI software in drug discovery.

The services segment is anticipated to hold a key market share during the projected timeframe. Services play a major role in implementing and utilizing AI technology in the drug discovery process. Pharmaceutical companies and research institutions are increasingly outsourcing tasks, such as data analysis, algorithm development, and machine learning, to AI service providers.

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Application Analysis

Based on application, the market is divided into drug optimization & repurposing, preclinical testing, and others. The drug optimization & repurposing segment held 53.1% share of the market in 2023. Advanced AI systems such as deep learning and drug modeling are instrumental in studying both the overall effectiveness of drugs and their undesirable pharmacological effects. The evolution of AI technology has simplified the process of repurposing pharmaceuticals into efficient versions, thereby mitigating adverse effects and enhancing overall efficacy. Pharmaceutical companies are leveraging this strategy to improve existing medications by altering their original indications to optimize their utility.

The preclinical testing segment is expected to expand at a high CAGR during the projected period. Traditional methods of patient selection based on medical history and suitability for studies are time-consuming. The overall clinical timeline for drug development is significantly reduced by employing AI systems and related technologies. Predictive machine learning algorithms play a crucial role in selecting lead molecules and patient populations, leveraging genome-specific data.

• For instance, Amplion utilizes its AI platform to meticulously identify biomarkers and support researchers in patient recruitment and biomarker selection, effectively trimming the clinical study timeline.

Therapeutic Area Analysis

On the basis of therapeutic area, the market is fragmented into oncology, cardiovascular diseases, infectious diseases, neurodegenerative diseases, metabolic diseases, and others

The oncology segment held a 23.6% market share in 2023. Given the susceptibility of disease diagnosis to human error, the utilization of AI systems holds promise for enhancing early disease detection. In recent years, AI has demonstrated increased precision in disease identification, particularly in cases such as lung cancer, which is often not detected until advanced stages with low survival rates. AI has the potential to offer personalized treatment options by refining existing AI systems, which are adept at analyzing vast datasets and deriving meaningful insights.

The infectious diseases segment is anticipated to expand at a significant pace in the coming years. AI and associated platforms such as the Internet of Things (IoT) are being leveraged to comprehend infectious diseases, their transmission dynamics, and infection mechanisms, as well as to enhance vaccine development. These platforms utilize interconnected devices, such as smartphones and other medical equipment, with data gleaned from these devices serving to decipher lifestyle patterns and anomalies for disease analysis. Increased imperative to devise methodologies for early detection and treatment of infectious diseases further propels the segment.

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Regional Outlook

In terms of region, the AI-powered drug discovery market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa.
North America held a 57.8% share of the market in 2023 and the market in the region is expected to grow at a rapid pace during the projection period. AI has become an integral part of various industries, including the pharmaceutical and biotech industries. Major US-based tech companies have partnered with esteemed biotech institutions to accelerate drug discovery, design, and repurposing efforts.

AI is being leveraged to analyze diseases comprehensively, leading to enhanced disease management strategies. The market growth in the region is further attributed to the widespread integration of AI technologies in the pharmaceutical industry, a substantial patient demographic, rising prevalence of chronic and infectious ailments, advanced healthcare infrastructure, and increasing clinical research and trials focused on AI and drug discovery in the region.

• The US grapples with a high prevalence of metabolic and lifestyle-related ailments. According to the CDC, about 38.1 million adults aged 18 years or older, or 14.7% of all US adults, had diabetes in 2021. Additionally, as per the National Institutes of Health, one in every seven adults in the US is affected by chronic kidney disease.

The market in Asia Pacific is anticipated to register a considerable CAGR during the forecast period, due to increased investment from biotech firms in research & development activities. Furthermore, the rising instances of chronic diseases in the region are boosting the demand for precision medicines, which further propels the market.

• In December 2023, Peptris Technologies, an AI drug discovery company headquartered in Bangalore, secured a pre-seed investment of USD 1 million from Speciale Invest. The funding is intended to bolster and expedite the advancement of its AI-driven discovery initiatives while broadening its range of potential drug candidates in the pipeline.
  

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Segments

The AI-powered drug discovery market has been segmented on the basis of

Component

• Software
• Hardware
• Services

Application

• Drug Optimization & Repurposing
• Preclinical Testing
• Others

Therapeutic Area

• Oncology
• Cardiovascular Diseases
• Infectious Diseases
• Neurodegenerative Diseases
• Metabolic Diseases
• Others

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Atomwise
• Alphabet
• Benevolent AI
• Cyclica
• CLOUD PHARMACEUTICAL
• EXSCIENTIA
• IBM Watson
• INSILICO MEDICINE INC
• Microsoft Corporation
• NVIDIA CORPORATION
• Schrodinger
• TOMWISE Inc

Competitive Landscape

Key players competing in the global AI-powered drug discovery market are Atomwise; Alphabet; Benevolent AI; Cyclica; CLOUD PHARMACEUTICAL; EXSCIENTIA; IBM Watson; INSILICO MEDICINE INC; Microsoft Corporation; NVIDIA CORPORATION; Schrodinger; and TOMWISE Inc.
These players utilize several development strategies, including product launches, partnerships, acquisitions, and geographical expansion, to increase their global presence. For instance,

• In October 2020, Beginning Therapeutics and Genentech announced a multi-target drug development agreement, leveraging Genesis' advanced AI capabilities to uncover therapeutic candidates for various diseases.