AI Drug Development Companies in Korea Look to Global Markets for Growth and Collaboration

Domestic AI drug development companies are seeking opportunities in global markets to overcome the limitations of the small domestic market, a conservative attitude towards AI drugs, and a sluggish investment environment. They are turning their eyes to larger global markets to thrive.

According to industry reports on the 19th, AZothBio is accelerating its entry into the Japanese market based on its AI drug development platform. The company participated in 'BioJapan 2024' last year, strengthening its network in Japan and laying the foundation for global collaborations. Additionally, AZothBio is actively collaborating with pharmaceutical, biotechnology, and AI companies in Japan as a member of Shonan iPark, Japan's innovation-driven pharmaceutical and biotech cluster.

AZothBio is currently in discussions with Japanese and global pharmaceutical companies for joint development and collaborative research on its autoimmune disease drug candidate AZB-101, based on technology transfer. They are also strengthening partnerships with Japanese companies using differentiated AI technologies, including cell-permeable peptides, antigen epitope discovery, cyclic peptide optimization, target protein binding sequence exploration, and predictive model development.

AZothBio's representative stated, "Global market expansion is a key strategy for the success of AI drug development, and Japan is a major hub that shows strong interest in our AI technology and innovative platform."

OncoCross, another AI drug development company, has been conducting research and development through collaborations with global companies such as France's 4P Pharma and Canada’s Ciclica since 2021, and with Switzerland’s AlphaMol Sciences since 2022. 

With 4P Pharma, OncoCross is developing an AI-based treatment for systemic sclerosis, and with AlphaMol Sciences, an AI-based treatment for liver fibrosis. OncoCross also conducted target discovery research for myelofibrosis with Ciclica, but the project was halted after Ciclica was acquired by Recursion Pharmaceuticals in 2023.

Syntekabio, another player in the field, has been seeking global expansion through collaborations as well. In November last year and February this year, Syntekabio entered into a conditional agreement worth 6.6 billion Korean Won with Kymera Therapeutics, a U.S.-based protein degradation drug development company, for drug efficacy material discovery. Syntekabio provided hit candidates for drug development in the early stages, with Kymera validating the selected candidates.

Challenges in Domestic AI Drug Development: Limited Collaboration and Investment

Collaborations between domestic pharmaceutical companies and AI drug developers are rare. The investment sentiment in the bio industry has not recovered, and few companies are capable of supporting the generation of data for AI drug developers. 

Moreover, the structure of the domestic public offering market, which requires certain levels of clinical results and sales from new drugs, makes it difficult for these companies to go public. As a result, AI drug development companies are increasingly looking to global markets to gain recognition for their technology and achieve sales, which is seen as a breakthrough for their survival.

In contrast, the global market is witnessing active investment and collaboration in AI drug development. AI companies like Schrödinger, Recursion, and Insilico Medicine are expanding their collaborations with global pharmaceutical companies and strengthening their data generation and platform validation through large-scale investments.

Although no AI-based drug has yet been approved, the number of drugs entering clinical stages is gradually increasing, and strategic partnerships between traditional pharmaceutical companies and AI companies are becoming stronger.

Isomorphic Labs, for example, signed agreements worth $1.7 billion with Eli Lilly and $1.2 billion with Novartis in early 2024. Both companies plan to start clinical trials for AI-designed drugs by the end of 2025, focusing on key disease areas such as oncology, cardiovascular diseases, and neurodegenerative diseases.

AI drug development startup Absci secured $20 million in investment from AMD in October 2024 to advance its AI-based protein design technology. Latent Labs, founded by former DeepMind researchers, raised $50 million in February and is working on synthetic protein research using generative AI.

Xaira Therapeutics attracted attention in 2024 by raising $1 billion. Xaira aims to apply AI models across the entire drug development process, from drug discovery to clinical development.

Shin Jae-min, CEO of AZothBio, emphasized, "AI drug development is not just a trend but a core strategy for future drug development." He added, "For domestic companies to compete in the global market, it is essential to restore investment sentiment. Investments in AI technology, talent acquisition, technology validation, and expanding global partnerships are necessary efforts across all fronts."