Futu News reported on December 29 that$INSILICO (03696.HK)$ The stock closed up 53.26% in the gray market today, at HKD 36.86 per share. Each lot contains 500 shares. Excluding handling fees, a profit of HKD 6,405 can be made per lot.
Source of market data: Futu Securities
Investment Highlights
Industry-leading position: The company is one of the leading enterprises in the global AI pharmaceuticals sector. Its core Pharma.AI platform empowers the entire drug development process. The average time from target discovery to confirmation of preclinical candidates is only 12-18 months, significantly shorter than the 4.5 years required by traditional methods, demonstrating industry-leading R&D efficiency. Leveraging its generative AI technology advantages, the company has produced over 20 assets at clinical or IND stages. Among these, the core candidate drug Rentosertib for the treatment of idiopathic pulmonary fibrosis has completed Phase 2a clinical trials with positive results, showing first-in-class potential. The company’s technical strength has been recognized by the industry, with relevant R&D achievements published in authoritative journals such as the Journal of Medicinal Chemistry.
Rich pipeline layout: The company's pipeline covers multiple areas with unmet medical needs, including oncology, immunology, fibrosis, and metabolic disorders, forming a diversified portfolio. Core pipelines are progressing well; besides Rentosertib, ISM4808, a PHD inhibitor for treating anemia associated with chronic kidney disease, has 'best-in-class' potential and has secured an exclusive licensing agreement with Taigene Pharmaceuticals for the Greater China region, with a total deal value reaching tens of millions of US dollars. To date, three assets have been licensed to international pharmaceutical companies, with contract values exceeding USD 2 billion, showcasing initial commercialization potential.
Risk Factors
R&D failure risk: Biopharmaceutical R&D is characterized by high risk and long cycles. All core pipelines of the company are currently in clinical stages, with only about a 50% success rate for Phase III clinical trials. Risks include subpar clinical trial data, safety issues, and other causes of failure. If key candidate drugs such as Rentosertib or ISM4808 do not progress as planned or ultimately fail, it will result in the inability to recover significant prior R&D investments, severely impacting the company’s profitability and market confidence.
Intense industry competition: Competition in the AI pharmaceutical field is becoming increasingly fierce. Domestically, the company faces competition from peers such as Wuxi Apptec and Zhixiang Biology, while internationally, giants like BenevolentAI are also making moves. At the same time, traditional pharmaceutical companies are accelerating the integration of AI technologies, and tech giants like Alibaba Cloud and Tencent Cloud are entering the space, leveraging their capital and ecosystem advantages to squeeze market share. With rapid technological iteration in the industry, if the company’s Pharma.AI platform fails to continuously upgrade, it risks losing its technological leadership position.
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Editor/Jamie