AI Alert: 3 Healthcare Stocks That Are Investing in Artificial Intelligence
We’re still in the initial stages of a massively disruptive artificial intelligence (AI) boom.
Big Tech is investing billions of dollars into it. Grand View Research saying we could be looking at a $1.8 trillion opportunity by 2030. And so far, it’s changing just about everything about everything.
That includes healthcare–which could create a $188 billion opportunity by 2030, according to analysts at Statista. Not only is AI assisting with diagnoses and clinical outcomes, but it’s also helping with drug discovery, and helping to decipher medical documents. What’s most exciting is that AI is just beginning to change how we approach healthcare.
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As we wait to see what AI brings to the table next, here are three top ways to trade the boom.
Schrodinger (SDGR)
Source: shutterstock.com/YAKOBCHUK V
Schrodinger (NASDAQ:SDGR) uses AI, machine learning, and molecular modeling to help find promising leads for drug development. All in an effort to find drug candidates that are far less expensive, effective, and take less time to develop.
According to the National Institutes of Health (NIH), “Drug discovery and development is a long, costly, and high-risk process that takes over 10–15 years with an average cost of over $1–2 billion for each new drug to be approved for clinical use.”
Plus, according to Pfizer (NYSE:PFE), “AI could assist pharma companies in getting medicines to market faster. AI today not only does flashy gene-sequencing work, it’s being trained to predict drug efficacy and side effects, and to manage the vast amounts of documents and data that support any pharmaceutical product.”
That could all lead to massive opportunity for SDGR. Helping, it’s already working with heavyweights like Bristol Myers Squibb (NYSE:BMY), and Sanofi(NASDAQ:SNY). And, according to Morgan Stanley, budgetary allocations for healthcare AI could run to 10.5% in 2024 from about 5.5%.
Recursion Pharmaceuticals (RXRX)
Source: Piotr Swat / Shutterstock.com
Or, we can look back at Recursion Pharmaceuticals. (NASDAQ:RXRX), which I spoke about on Aug. 8. At the time, Nvidia (NASDAQ:NVDA) had just investing $50 million in the company to help it create new AI models, and software to create new drug candidates.
Since then, RXRX dropped to about $6 a share. But again, don’t write it off. If AI-assisted drug development can help create blockbuster drugs, stocks like RXRX could explode higher.
At the moment, RXRX is working on treatments for cerebral cavernous malformation, neurofibromatosis type 2, familial adenomatous, APC mutant cancers and ovarian cancer to name a few parts of its pipeline. Even better, RXRX is working with Bayer on precision oncology.
“The oncology-focused collaboration will leverage Bayer’s small molecule compound library and expertise in biology and medicinal chemistry as well as Recursion’s purpose-built artificial intelligence-guided drug discovery platform. This strategic shift will enable Bayer to utilize Recursion’s capabilities to initiate and advance the identification of novel therapeutic targets for challenging oncology indications with high unmet need,” as noted in a press release.
Relay Therapeutics (RLAY)
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There’s also Relay Therapeutics (NASDAQ:RLAY), a clinical-stage precision medicine company that’s working to change the drug discovery process, as well. In fact, its Dynamo Platform relies heavily on artificial intelligence and machine learning for drug discovery.
At the moment, it’s working on RLY-4008, which, according to the company, is “designed to be an oral, small molecule, selective inhibitor of FGFR2, a receptor tyrosine kinase that is frequently altered in certain cancers.”
Even more exciting, RLY-4008 is already showing promising Phase 1/2 data.
It’s also working on RLY-2608, a PI3Ka inhibitor, which is the “central regulator of a signaling pathway that has been linked to a diverse group of cellular functions related to cancer including cell growth, proliferation and survival. “
Those are just a few being designed with the help of AI/ML.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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