Southwest Securities has released a research report forecasting INSILICO's (03696) revenue for 2025-2027 to be $59 million, $155 million, and $202 million, respectively, with corresponding Price-to-Sales (PS) ratios of 78x, 30x, and 23x.
The company's innovation capabilities in its AI platform have been validated, promising long-term development prospects.
As more pipeline assets advance into clinical stages and out-licensing agreements are secured, the company is poised for sustained value realization.
This marks the initiation of coverage with a recommendation for investors to actively monitor the stock.
The core competitive strength of the company lies in its self-developed, globally leading end-to-end generative AI platform, Pharma.AI.
1) This platform has significantly shortened the timeline from target discovery to the identification of a pre-clinical candidate (PCC) from the industry average of 4.5 years to just 12-18 months, a capability thoroughly validated through over 40 projects and 27 PCCs. 2) The company's primary business model focuses on drug discovery and pipeline development, encompassing out-licensing, collaborative development, and proprietary development.
Since 2026, the company has secured three business development (BD) collaborations, with upfront payments totaling $42 million (including recent R&D milestones) and a total potential deal value of up to $1.074 billion. 3) The core proprietary pipeline asset, ISM001-055, represents the world's first fully AI-discovered and designed drug to have produced Phase II clinical data.
It holds the potential to become a disruptive therapy and drive continuous value realization.
The globally leading end-to-end AI drug discovery platform establishes a formidable core technological barrier.
The company's key competitive advantage is its proprietary, integrated end-to-end generative AI platform, Pharma.AI, which combines capabilities in biology, chemistry, and clinical trial prediction.
This platform drastically reduces the time required from target discovery to pre-clinical candidate (PCC) identification from the industry standard of 4.5 years down to 12-18 months, significantly enhancing R&D efficiency and reducing costs.
INSILICO is the only publicly traded AI-driven pharmaceutical company to have achieved a full, closed-loop process from "target discovery → molecule design → clinical candidate drug," underscoring its deep technological moat.
The dual-engine business model of "AI platform + drug pipeline" creates a commercial closed loop and a powerful flywheel effect.
The company realizes value through two primary modes: 1) Drug discovery and pipeline development, generating upfront payments, milestone fees, and sales royalties by out-licensing or co-developing high-value pipeline assets; and 2) Software solutions, producing subscription-based revenue from licensing the Pharma.AI platform.
These models have gained market validation, with the company securing nine out-licensing agreements boasting a total potential value exceeding $4 billion and establishing collaborations with 13 of the world's top 20 pharmaceutical companies.
Platform technology licensing provides the company with cash flow and vast validation data, while the success of internal pipelines, in turn, refuels and validates the AI platform's capabilities, making it increasingly precise and efficient, thereby creating a powerful "data flywheel" effect.
A rich portfolio of proprietary pipelines is entering a phase of value realization, with core products demonstrating blockbuster potential.
The company has leveraged its platform to generate nearly 20 assets that are either in clinical stages or under Investigational New Drug (IND) application review.
The most advanced pipeline, ISM001-055, is the world's first candidate drug fully discovered and designed by generative AI to have completed a Phase IIa clinical trial, targeting Idiopathic Pulmonary Fibrosis (IPF).
Recent clinical results indicate that patients treated with ISM001-055 showed a dose-dependent improvement in lung function.
In the highest dose group (60mg once daily), patients exhibited an average increase of 98.4 ml in Forced Vital Capacity (FVC) from baseline, whereas the placebo group showed a decline of 20.3 ml, resulting in a notable difference of 118.7 ml.
A Phase IIb or Phase III clinical trial is anticipated to commence in 2026.
The IPF market offers substantial potential, and if ISM001-055 successfully reaches the market, it could emerge as a transformative therapy.
Risk factors include potential shortfalls in innovative drug R&D and commercialization, intensifying competition, and changes in industry regulations.
Comments