A March of “Big Tech” Corporations Into Pharmaceutical Industry

by Andrii Buvailo

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Topics: Industry Trends    Digitalization   

In November 2021, the parent company of Google, Alphabet, Inc., announced the launch of a new commercial subsidiary in the biomedical space -- Isomorphic Labs. Demis Hassabis, co-founder and CEO of DeepMind, will serve also as a temporary CEO of the newly formed company to ensure close collaboration between the two organizations, and the creation of a strong development strategy. 

As Hassabis wrote in his blog post, the name of the company “isomorphic” reflects his belief that biological systems and information science can, in principle, be sharing some common underlying structure -- a situation described by mathematicians as an isomorphic mapping between two systems or sets of data. 

According to Encyclopaedia Britannica, an isomorphism preserves some structural aspect of a set or mathematical group, so it is often used to map a complicated set (in our case -- biology) onto a simpler or better-known set (information models) in order to establish the original set’s properties. 

Unsurprisingly, the news about the launch of Isomorphic Labs immediately generated a “tsunami” in the media space, as with most announcements from Alphabet/Google. It yet remains to be seen how Isomorphic Labs is going to contribute to the industry as they have not announced much since the foundation. But it brings us to a discussion of a more general trend in the pharmaceutical space -- it gets crowded with traditionally “non-pharmaceutical” technology corporations, like Google. 

How tech giants are slowly eating (bio)pharmaceutical market

Alphabet has a rich track record of activity in the life sciences space and healthcare tech, so the launch of Isomorphic Labs is not a surprise, but an anticipated continuation of their expansion strategy. 

Perhaps, the most widely publicized (and deservedly so) achievement of Alphabet’s group in the life sciences is a recent DeepMind breakthrough where their artificial intelligence-based engine AlfaFold learned to predict with high accuracy protein structures using just the primary protein sequence -- a string of amino acids. Not only did DeepMind open a brave new world of opportunities for target discovery and drug design, but it brought us a step closer to building comprehensive digital models of biological systems. 

However, DeepMind’s efforts in basic biology research are just a small part of what Alphabet’s group is doing in the Life Sciences. According to a recent report “Landscape of Advanced Technology Companies in Pharmaceutical Industry”, published by UK-based analytical agency Deep Pharma Intelligence, Alphabet developed a portfolio of Life Science and healthcare projects -- via direct investments, R&D collaborations, or via formation of its own subsidiaries -- focusing on activities as diverse as small molecule drug discovery, pre-clinical and clinical research, AI-driven healthcare and diagnostics, immunotherapy, and vaccine development, and many other directions. 

Source: Deep Pharma Intelligence 

For example, Alphabet’s life science subsidiary Verily is developing medical devices, molecular research platforms and computational tools for life sciences. The company is advancing next generation surgical robotics with machine learning and sophisticated imaging technology;  developing the next generation of miniaturized continuous glucose monitors (CGM) in partnership with Dexcom; developing a sensor-based wearable for continuous monitoring of health data. Verily has a robust nanoparticle R&D program including a scalable platform for synthesis, characterization and high-throughput screening of particles with predictable physicochemical properties. The program is focused on lipid-based nanoparticles (LNPs and liposomes) -- the most widely used nanocarriers for drug delivery. 

Through its venture arm Google Ventures, Alphabet invested in such Life Science companies as Edital Medicine (CRISPR gene editing), Flatiron (real-world evidence platform in oncology),  Pact Pharma (a clinical stage immuno-oncology company dedicated to engineering T cell therapies), GRAIL (a cancer diagnostics company), ARCUS Biosciences (designing precision combinations to treat cancer), and many others. 

Another venture fund, Google’s AI-focused Gradient Ventures, invested in BenchSci (AI-driven search for antibodies), Rad AI (a platform for radiologists), and other companies -- primarily in digital health and operational functions and not directly involved in life science research. 

In 2019, Google announced a joint virtual Innovation Lab with Sanofi to “radically transform how future medicines and health services are delivered”. Last year, Boehringer Ingelheim announced collaborative agreement with Google Quantum AI (Google), focusing on researching and implementing quantum computing in pharmaceutical research and development (R&D), specifically including molecular dynamics simulations.

With DeepMind’s success in basic biology, Alphabet demonstrated that possessing state-of-the-art Artificial Intelligence technologies, along with everything they require (big data, computational resources, IT components, etc) can be a competitive business vehicle for a non-Life Sciences company to quickly invade scientifically-driven market and even achieve breakthrough results in what is traditionally a territory of academic labs or pharmaceutical companies. 

This sort of “tech supremacy” is eagerly utilized by other “big tech” corporations, such as US giants Microsoft, Oracle, NVIDIA, and Chinese giants Tencent and Baidu, as shown in the table below (non exhaustive list). As we can see, most of them have partnerships, investments, and even M&A deals in the pharmaceutical and healthcare spaces. 

Source: Deep Pharma Intelligence 

One vivid example I’d like to also review is NVIDIA’s recently launched Clara Discovery, which is a collection of frameworks, applications, and AI models enabling GPU-accelerated drug discovery, with support for research in genomics, proteomics, microscopy, virtual screening, computational chemistry, visualization, clinical imaging, and natural language processing (NLP). Some of the leading AI-driven drug discovery companies, including Atomwise, Insilico Medicine, Schrodinger, and Vyasa Analytics are listed as partners of Clara Discovery project, 

Source: NVIDIA Clara Discovery

Some ten years ago, probably few people could expect the launch of a full-scale biomedical R&D platform by a developer of computer hardware, and creator of video games. Today, NVIDIA managed to not only enter the pharma R&D space with their products, but also accumulated a remarkable community of life science and healthcare organizations and advocates through their NVIDIA Inception program for startups. 

Big Tech in China

A separate, but not less exciting story, is China -- a “rising dragon” of pharmaceutical research and healthcare innovations, having such giants as Tencent, Baidu and Alibaba contirbuting to the this field.

For instance, in 2021 Tencent entered into strategic collaboration with US drug maker Eli Lilly, to focus on empowering medical services with cloud technology, big data analysis, and artificial intelligence. The collaboration focused on oncology, immunological diseases, pain, and neurodegenerative diseases, and help patients in terms of seeking medical advice and receiving therapies. 

Earlier, in 2019, Tencent partnered with Merck KGaA with the aim of developing digital, artificial intelligence-based platforms to help increase access to healthcare services and promote disease awareness. In 2020, Tencent participated in a $500 million investment round for DXY.cn, a Chinese healthcare community platform. Tencent-baked WeDoctor, a global consultation and prevention center, providing online health enquiry service, psychological support, prevention guidelines and real-time pandemic reports, is preparing for IPO in Hong Kong. 

As one may notice, Tencent is primarily playing in digital health, a particularly strong industry in China, but in terms of drug discovery, Tencent also created iDrug -- a deep learning-based modular drug discovery platform, including such workflows as protein structure prediction, virtual screening, generative chemistry, ADMET prediction, and synthetic route planning for chemical compounds. If you are interested in a more details review of Chinese companies and company trends in the pharma -- let me know in the comments and I will explore the topic in one of the future newsletter editions.

Source: Tencent

What I have reviewed above is just a small tip of an iceberg of what largest technology corporations are doing in the area of Life Sciences and Digital Health -- a decent book can be written about projects and investments by Google alone. But what is clear is that such companies are smart at building platform-based businesses, and they possess cutting-edge artificial intelligence and data technologies -- both critical components of the ongoing digital revolution of the biopharmaceutical industry and healthcare. So they have a lot of advantage in Life Sciences.  

Check also last week's Nesletter, where I shared my observations about a wave of “digital biotechs” -- a new kind of drug discovery companies which are building AI-driven research platforms for rapid and cost effective research with higher probabilities of success (and with significant achievements in some cases).

Topics: Industry Trends    Digitalization   

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