NVIDIA and Eli Lilly have declared their intention to invest a staggering $1 billion over the forthcoming five years. This investment will be channeled into constructing a joint research laboratory in the San Francisco Bay Area, with the overarching goal of expediting the integration of artificial intelligence within the pharmaceutical sector.

As a pivotal facet of AI applications, AI-driven drug discovery is witnessing a surge in popularity. Insights reveal that the crux of AI-driven drug discovery's value lies in its ability to substantially amplify the efficiency of drug research in its nascent stages.

A Detailed Examination of the AI-Driven Drug Discovery Industrial Chain's Various Segments

Upstream: Infrastructure Layer (Computing Power/Data/Algorithms)

Computing Power: NVIDIA, AMD, Huawei Cloud, Alibaba Cloud, AWS.

Data: Multi-omics databases, biological sample repositories, medical real-world data (RWD) platforms.

Algorithms/Tools: Molecular generation, virtual screening, clinical trial optimization.

Midstream: R&D Application Layer (Core Value Zone)

Target Discovery: AI delves into multi-omics data to pinpoint potential targets.

Molecular Design/Optimization: Generative AI crafts candidate molecules, conducts virtual screening, and predicts absorption, distribution, metabolism, excretion, and toxicity (ADMET).

Preclinical Validation: AI, coupled with automated experiments, accelerates cell/animal validation processes.

Clinical Trial Optimization: Patient recruitment, protocol design, and endpoint prediction are streamlined.

CXO + AI: The integration of Contract Research Organizations (CRO)/Contract Development and Manufacturing Organizations (CDMO) with AI augments efficiency.

Downstream: Commercialization and Ecosystem Layer

Production and Quality: AI refines CDMO production processes and ensures real-time quality control.

Regulation and Compliance: AI-assisted declaration (application) and safety monitoring are implemented.

Terminal Applications: Pharmaceutical company's proprietary pipelines, scientific research translation, and medical services.

Profitability of Enterprises in the AI-Driven Drug Discovery Industrial Chain

Corporate profitability is typically gauged by the volume and caliber of earnings over a specified duration. Profitability analysis entails a thorough examination of a company's profit margins.

This article forms part of the corporate value series, centering on [Profitability]. It handpicks 18 enterprises within the AI-driven drug discovery industrial chain as research subjects and employs metrics such as return on equity (ROE), gross profit margin, and net profit margin for evaluation.

Data is sourced from historical records and does not foretell future trends; it is intended solely for static analysis and does not constitute investment advice.

No. 10 Hualan Co., Ltd.

Industry Segment: Medical Consumables

Profitability: ROE of 2.12%, gross profit margin of 38.79%, net profit margin of 8.45%

Performance Forecast: ROE has oscillated between 2%-5% over the past three years, with the latest forecast averaging 4.63%

Main Products: Conventional rubber stoppers constitute the primary revenue stream, accounting for 48.91% of total revenue, with a gross profit margin of 23.17%

Company Highlights: Hualan Co., Ltd. has ventured into establishing a wholly-owned subsidiary in Hainan Province, primarily engaged in AI-driven innovative drug research and development solutions and services.

No. 9 Tri-Prime Gene

Industry Segment: Biopharmaceuticals

Profitability: ROE of 3.60%, gross profit margin of 82.16%, net profit margin of 8.64%

Performance Forecast: ROE has persistently declined to 3.60% over the past three years, with the latest forecast averaging 3.4%

Main Products: Yundesu is the mainstay of revenue, accounting for 99.18% of total revenue, with a gross profit margin of 77.45%

Company Highlights: Tri-Prime Gene harnesses its gene recombinant protein technology platform, enhanced by AI, to execute molecular design, preparation processes, and performance testing of collagen with varying molecular weights.

No. 8 Pharmablock

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 7.56%, gross profit margin of 38.06%, net profit margin of 13.00%

Performance Forecast: ROE has fluctuated between 7%-13% over the past three years, with the latest forecast averaging 5.40%

Main Products: Products and services during drug development and commercialization stages are the primary revenue generators, accounting for 80.20% of total revenue, with a gross profit margin of 31.57%

Company Highlights: Pharmablock's AI drug research and development team has pioneered an AI-driven global optimization molecular generation algorithm platform targeting unique dynamic chemical spaces.

No. 7 Hipro Bio

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 1.59%, gross profit margin of 23.86%, net profit margin of 3.14%

Performance Forecast: ROE has steadily declined to 1.59% over the past three years, with the latest forecast averaging 5.20%

Main Products: Drug discovery is the principal revenue source, accounting for 58.14% of total revenue, with a gross profit margin of 32.78%

Company Highlights: Hipro Bio's PR-GPT multimodal large language AI model finds applications in drug design and chemical research, primarily leveraging its robust generation and prediction capabilities.

No. 6 HitGen

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 3.74%, gross profit margin of 51.86%, net profit margin of 11.69%

Performance Forecast: ROE has consistently risen to 3.74% over the past three years, with the latest forecast averaging 6.69%

Main Products: New drug R&D services are the primary revenue contributors, accounting for 99.95% of total revenue, with a gross profit margin of 51.89%

Company Highlights: HitGen collaborates with Tencent AI Lab to share the AI-driven molecular skeleton jumping system. This algorithm is anticipated to expedite the small molecule design process in drug research and development.

No. 5 Tasly

Industry Segment: Traditional Chinese Medicine

Profitability: ROE of 7.68%, gross profit margin of 67.14%, net profit margin of 10.11%

Performance Forecast: ROE peaked at 8.75% over the past three years, with the latest forecast averaging 9.35%

Main Products: Traditional Chinese medicine is the main revenue generator, accounting for 70.89% of total revenue, with a gross profit margin of 69.76%

Company Highlights: Tasly has devised a digital resolution technology for traditional Chinese medicine quality, spanning from 'gene network-target of action – pharmacodynamic components,' fostering in-depth exploration of traditional Chinese medicine mechanisms and combinatorial drug screening research.

No. 4 CETC Digital

Industry Segment: IT Services

Profitability: ROE of 11.98%, gross profit margin of 19.19%, net profit margin of 5.10%

Performance Forecast: ROE has oscillated between 11%-14% over the past three years, with the latest forecast averaging 10.89%

Main Products: Industry digitization is the primary revenue stream, accounting for 85.67% of total revenue, with a gross profit margin of 16.89%

Company Highlights: CETC Digital has forged a partnership with Amazon Web Services to create an AI-assisted drug research and development platform, which has been deployed at a major pharmaceutical company.

No. 3 Haoyuan Pharmaceutical (HaoYuan Medicine)

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 7.61%, gross profit margin of 47.97%, net profit margin of 8.72%

Performance Forecast: ROE has fluctuated between 5%-10% over the past three years, with the latest forecast averaging 9.35%

Main Products: Molecular building blocks, tool compounds, and biochemical reagents are the primary revenue sources, accounting for 66.03% of total revenue, with a gross profit margin of 62.21%

Company Highlights: HaoYuan Medicine specializes in small molecule drug research and development + AI technology, seamlessly integrating AI-driven drug discovery to encompass the entire drug discovery to process development continuum.

No. 2 Pharmaron

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 13.70%, gross profit margin of 34.24%, net profit margin of 13.96%

Performance Forecast: ROE has oscillated between 13%-14% over the past three years, with the latest forecast averaging 11.21%

Main Products: Laboratory services are the primary revenue generators, accounting for 57.40% of total revenue, with a gross profit margin of 44.92%

Company Highlights: Pharmaron leverages artificial intelligence technology to construct a machine learning model capable of accurately simulating the in vitro growth curves of immortalized cells.

No. 1 Sunno Pharmaceutical

Industry Segment: Medical R&D Outsourcing

Profitability: ROE of 17.21%, gross profit margin of 50.18%, net profit margin of 15.67%

Performance Forecast: ROE has oscillated between 17%-20% over the past three years, with the latest forecast averaging 16.96%

Main Products: Pharmaceutical research services are the primary revenue contributors, accounting for 51.80% of total revenue, with a gross profit margin of 61.37%

Company Highlights: Sunno Pharmaceutical centers its focus on AI-empowered peptide drug research and development as its core entry point, extensively deploying AI-driven drug discovery through self-built technology platforms, external strategic collaborations, and pipeline implementation.