In biotech, one thing isn't going to change.
The "bread and butter" technology that makes up 90% of the pharmaceutical market - good, old-fashioned small molecules created in the laboratory - isn't going anywhere.
Yes, incredibly innovative treatments like T-cell therapy and microbiome therapies (and firms like Bill Gates' new favorite $6 million company) are all having a huge impact on healthcare.
But we use small, synthetic molecules to create everything from aspirin and corticosteroids to sofosbuvir (Sovaldi) and ivacaftor (Kalydeco) - and we'll keep doing so for a long time to come.
The small molecule technique dates back to the 1890s, but that doesn't mean innovation cannot happen within that field. Scientists are always hard at work in the labs, creating cutting-edge drugs, often tailored to treat a very specific disease or subset of patients.
Meanwhile, I've turned up a tiny British company that's using its artificial intelligence (AI) platform discover promising small molecule treatments faster - and cheaper - than ever before.
I call it "biointelligence."
It's a perfect illustration of the "Convergence Economy" we talk so much about here. By combining two or more fields of tech - in this case biotech and AI - it's like a formula in which 1 + 1 = 3... and often a lot more that.
Today, we're going to learn all about this tiny company and its brand-new biointelligence technology.
This company is privately held - so if you ask, Wall Street will say you can't invest in it.
But I've found a way you can.
In fact, I've found two ways.
Both of them will lead you to outsized returns - and hefty dividends.
Let's take a look...
This Is Finding Effective Treatments Faster
Don't worry if you've never head of the Dundee, Scotland-based firm Exscientia Ltd. Few folks have.
But this small company is upending drug development as we know it by adding a Silicon Valley-style innovation - artificial intelligence - into the mix. AI harnesses the power of computing, machine learning, and advanced algorithms to greatly augment what human minds can do - and find profitable patterns they can't.
The $1.6 trillion biopharmaceutical sector is ripe for this kind of tech.
Let me explain why...
It now takes roughly five years from the time scientists begin looking at an area of disease before they land on a promising compound. Then after that, a drug firm will spend an average of $2.9 billion over the course of 10 years to get the resulting treatment through U.S. Food and Drug Administration approval and out to patients.
According to a recent report from the Tufts Center for the Study of Drug Development, here's how the costs break down: $1.4 billion in direct spending, $1.2 billion in lost use of funds over the decade, and more than $300 million in post-approval costs. That's a 145% increase in costs since 2003, Tufts found.
It sounds onerous and expensive, but i'’s been the proven safe path from "big idea" to pharmacy shelf for a long time.
Not for much longer.
Exscientia is changing all that. Here's how it works...
- The firm's biointelligence engine combs through thousands of drug studies to fashion best practices.
- The biointelligence system then employs Big Data analytics to comb through millions of novel, project-specific compounds (nearly all small molecules).
- After that, it produces a list of a data-rich compounds ripe for testing in the lab.
With this biointelligence process, Exscientia says it can come up with a list of promising compounds in one-fourth the time of standard approaches.
That's huge - both for patients looking for more effective treatments and for investors looking for bigger gains.
The Inventor of Viagra Is on This Team
This small startup has winner written all over it... in no small measure because it meets Rule No. 1 of my Strategic Tech Investor "Tech Wealth Blueprint" - "Great Companies Have Great Operations."
Just take a look at Exscientia CEO Andrew Hopkins.
He spent 10 years at Big Pharma leader Pfizer Inc. (NYSE: PFE), where he was responsible for establishing new research methods for finding potential drugs.
Hopkins also has raised a total of $50 million for academic and commercial research activities as Chair of Medicinal Informatics at the University of Dundee. And he's the author of some of the most highly cited papers in modern drug discovery.
His chief chemist is no slouch either. Andy Bell is a coinventor of sildenafil - that's Viagra to you and me - and a contributor to the development of antifungal treatment voriconazole (Vfend). These products have racked up sales of nearly $40 billion around the world.
With more than 30 years of experience in the field, Bell is the winner of the American Chemical Society's Technical Achievement in Organic Chemistry Award.
Like I said before, this is a privately held firm, so Wall Street will tell you that there's no way you can directly profit from this tiny firm's work.
Unless you know where to look.
Two of my favorite drug companies have invested in and are working with Exscientia.
Both of these pioneers have the potential to profit from biointelligence.
And now so do you...
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.