The Convergence Is Coming

Van’s Note: Van Bryan here, Jeff Brown’s managing editor. Today, our offices and the markets are closed in observation of the Fourth of July holiday here in the U.S. We wish all our American readers a happy holiday, and we’ll return with our regular Bleeding Edge content tomorrow.

In the meantime, we’re bringing readers a special essay on one of the top trends we’re following here in The Bleeding Edge – the convergence of biotechnology and artificial intelligence (AI).

This technology will not only help us live longer, healthier lives… It will also bring us extraordinary investment opportunities.

Read on for the full story.

By Jeff Brown, Editor, The Bleeding Edge

Dear Reader,

The news was buried deep in the Financial Times. It was nowhere near the front page… But it should have been.

In January 2020, the FT reported that Sumitomo Dainippon Pharma, a Japanese company, would be taking its new compound for treating obsessive-compulsive disorder to human clinical trials. Most people probably didn’t give the article a second thought.

But that announcement wasn’t the real story…

The breakthrough was this: The compound had been entirely invented by an artificial intelligence (AI). A form of AI called machine learning had generated and sifted through tens of millions of possible molecules to determine the best drug candidates.

And it had happened just like I predicted.

In December 2019, I’d written:

In 2020, I predict an AI will discover a completely new drug therapy without any assistance from a human. In other words, a human will provide the data for the AI to study. But artificial intelligence will develop the new drug therapy all on its own. I believe that will happen sometime in the next 12 months. 

That prediction took barely a month to come true.

These moments are the ones that I remember. They are inflection points marking the beginning of massive multiyear trends in technology development.

It’s like the “first plasma” of a nuclear fusion reactor… or the release of the very first smartphone. We know that events like these will change the world.

And, as we might guess, there are big investment opportunities too.

Even better, the convergence of AI and biotechnology is just getting started…

Changing the Game

Back in March this year, Massachusetts General Hospital caught my eye when it announced a team was using AI to comb through existing drugs already approved by the Food and Drug Administration (FDA). The AI would identify which ones could potentially be repurposed to treat Alzheimer’s disease.

The team unleashed the AI on 80 FDA-approved drugs, and it came back with a ranked list of candidates that could be effective in treating Alzheimer’s.

At the top of the list were several anti-inflammatory drugs currently used to treat rheumatoid arthritis and blood cancers. These drugs work by inhibiting certain proteins that cause inflammation.

And the AI’s analysis suggested that they could treat Alzheimer’s as well.

This is just one example. But this method extends beyond Alzheimer’s. It is possible that we already have developed drugs that can help with some of our most difficult-to-treat diseases. We just don’t know it yet.

So how come we haven’t thought to check old drugs for new disease targets before?

The answer is that it is too expensive and too time-consuming with traditional drug discovery methods. Companies would need to dedicate several years and millions of dollars to the effort without an informed idea of what the probability of success would be.

That’s where AI changes the game.

An AI can quickly and cheaply screen a database of existing drugs to determine which ones have a reasonable probability of being effective against other disease targets.

That takes much of the guesswork out, saving millions of dollars and valuable years in the process.

This is why the convergence of AI and biotechnology is going to completely reshape the industry.

The drug discovery and development process is going to become far more efficient, and we’ll see an explosion of new treatments for cancer and other diseases that plague humanity.

We are no more than a decade away from being able to cure many diseases that were previously thought untreatable.

That’s great news… And as investors, this massive trend will also present us with some potentially life-changing investment opportunities along the way…

The Money Is Flowing

Earlier this year, another company operating at the center of this convergence held a huge funding round. An AI-powered drug discovery company named Insitro raised a whopping $400 million in its Series C.

That’s an especially incredible raise considering this company was just formed in 2018. It’s not even four years old yet.

Among the backers were Andreessen Horowitz, Casdin Capital, ARCH Venture Partners, Foresite Capital, GV, Third Rock Ventures, Two Sigma Ventures, HOF Capital, and Alexandria Venture Investments. There are some heavy-hitting VCs here.

And it’s clear that these early backers understand the profit potential in this area…

In fact, these are the kinds of companies I look for with my own angel investments: a highly disruptive, bleeding-edge technology that’s solving a major problem or pain point… something removing unnecessary “friction” in a product, service, or transaction… and teams with deep industry expertise and a strong go-to-market strategy.

And the floodgates are opening. Just last week, we covered more money pouring into Insilico, another company that just raised $255 million during its Series C, pushing its valuation above the $1 billion mark.

We’re going to see this continue as the convergence trend picks up speed…

Even better, right now we have the chance to get in early… Before the mainstream media and Wall Street understand the opportunity that we have.

Because we haven’t had drugs developed entirely by AI approved by the Food and Drug Administration (FDA) before, some have suggested that the FDA will be especially critical of these drugs.

But these people are completely missing the point.

This process eliminates all of the trial-and-error testing that humans would need to do manually. The AI is able to evaluate an exponentially larger number of possible therapeutic approaches than a human team would be able to – in a fraction of the time.

And as a result, therapies are more likely to produce clean datasets that demonstrate safety and efficacy.

That’s what the FDA will see, and that’s what matters the most.

And the fact that this isn’t yet well-understood is a tremendous opportunity for us.

This is going to be a space with the chance to bring life-changing wealth to investors who get in as this trend picks up steam.

And while many promising companies are still private right now, I’ve found a company working at the heart of the convergence… One that is well established and has big ambitions for the future…

And I recently recorded a presentation to tell investors all about it. If you’d like to learn more, just go right here to watch.

Regards,

Jeff Brown
Editor, The Bleeding Edge

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