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Shares of Insilico Medicine Cayman, a Hong Kong-listed biotech company utilizing artificial intelligence for drug discovery and design, declined following its founder’s denial of takeover rumors by a major U.S. pharmaceutical company.
The company’s stock closed down 4.6% at HKD56 (approximately USD7.14) per share today, after fluctuating between a 6% gain earlier in the day and a 9.7% drop later in the afternoon.
Insilico’s valuation remains relatively modest, and the company aims to preserve its independence, according to the co-CEO. He emphasized that there is no plan for the firm to be acquired by a larger pharmaceutical entity.
The acquisition speculation came after the announcement of a $2.8 billion agreement with the U.S. pharmaceutical giant on March 29, which prompted an antitrust review by the Federal Trade Commission. Under the agreement, both companies will leverage Insilico’s AI-driven drug discovery technology to speed up the development of new treatments across various medical conditions.
The CEO assured that the deal has already received approval from the FTC.
While technology giants like Google are also investing in AI-based drug discovery, the development process in this field involves significant experimental validation. This is why Insilico is concentrating its efforts in China, where infrastructure and supportive policies are highly favorable, the executive explained.
Increasingly, companies are recognizing the strategic value of AI in the pharmaceutical industry, noted the company’s co-CEO and chief scientific officer. This awareness is driving more collaboration opportunities, with the number and scale of partnerships increasing since last year.
Insilico supports its R&D efforts through software services, collaborative drug development projects, and licensing its pipeline products. Providing software solutions helps foster industry relationships and lay the groundwork for future collaborations — a strategy that led to its deal with the major pharma company.
In the near term, the company primarily relies on project licensing for revenue, but it is open to the possibility of expanding its pipeline into late-stage clinical trials for profit within the next five to ten years, the CEO indicated.
Based in Boston with core operations in Shanghai, the company went public last December but has yet to turn a profit. As the first AI-focused biotech firm listed in Hong Kong, it is also part of the Stock Connect program linking the city’s stock exchange with mainland China markets.
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