Artificial Intelligence for Drug Development and Discovery Market Expected to Reach $4.81 Billion by 2027

According to a new report published by Allied Market Research, titled, “Artificial Intelligence for Drug Development and Discovery Market By Type, Indication, and End User: Opportunity Analysis and Industry Forecast, 2020–2027,”the artificial intelligence for drug discovery and development market size was valued at $0.52 billion in 2019 and is projected to reach $4.81 billion by 2027, registering a CAGR of 31.6% from 2020 to 2027. 

Drug discovery is the initial step in the process of a novel drug candidate’s identification and its therapeutic target. Artificial intelligence has been extensively used in the healthcare industry, specifically utilized in finding new drugs. As artificial intelligence plays an important role in discovery, design, recognition, and screening of molecules effectively in shorter time. Moreover, presence of a smaller number of competitors, higher adoption rate, and effectiveness of AI in finding of a novel drug are anticipated to provide lucrative opportunities for the growth of the global artificial intelligence for drug discovery and development market.
Artificial intelligence technologies are playing a crucial role to combat the pandemic. Though the use of Artificial intelligence in drug discovery and development, is not a new belief, but its application in the COVID-19 outbreak situation has proven its prospects in the sector. Artificial intelligence for drug discovery and development market would show a significant market growth due to Covid-19 pandemic, owing to rise in adoption of AI with rise in number of partnership between AI providers and pharma and biotech companies to develop drug for treatment of COVID-19. For instance, in July 2020, Insilico Medicine announced partnership with Arctoris to discover new COVID-19 drugs. 

The AI for drug discovery and development market is witnessing rapid growth, due to rise in number of cross-industry partnerships and collaborations. Furthermore, the increase in importance of AI in drug discovery and development and rise in funding of R&D activities for the use of AI technology in the field of drug discovery is expected to fuel the market growth. However, lack of skilled personnel and insufficient datasets for drug discovery& developments are expected to restraint the market. On the contrary, increase in awareness related to artificial intelligence and the untapped potential of emerging markets, such as China and India, are expected to present various opportunities for market expansion. 

In terms of type, the preclinical and clinical testing segment occupied the highest share in 2019, owing to rise in number of collaborations of pharma companies with AI providers for clinical and preclinical testing further contributes the market growth. The De Novo drug design and drug optimization segment is projected to witness the fastest growth rate during the forecast period owing to increase in adoption of AI for De novo studies. 

The oncology segment is projected to grow at the highest CAGR of 32.6% during the forecast period, owing to increase in adoption of AI to discover drug for treatment of different forms of cancer, large number of promising drugs in the oncology pipeline, higher adoption of AI to discover & develop oncology drugs and increase in number of collaborations between large pharma companies with AI providers are majorly driving the growth of this segment. 

North America held the major share of the artificial intelligence for drug discovery and development market in 2019 and is expected to continue its dominance during the forecast period, owing to strong economies in the U.S. and Canada; high adoption rate of AI technologies due to large number of investments to boost the drug discovery industry; and large number of cross industry collaborations and partnerships majorly fuel the market growth. However, Asia-Pacific is expected to grow at the highest CAGR during the forecast period, owing to rise in adoption of advanced AI technologies, and growth in focus of major players on increasing their presence in emerging Asian countries.

Key Findings Of The Study 

• By type, the preclinical and clinical testing segment occupied 33.9% share of the artificial intelligence for drug discovery and development market in 2019.

• By indication, the oncology segment is anticipated to grow with the highest CAGR throughout the forecast period.

• By end user, the pharmaceutical and biotechnology companies segment occupied 86.1% share of the artificial intelligence for drug discovery and development market in 2019.

• By region, North America is anticipated to experience growth at 53.50% during the forecast period.

Prominent key players operating in the artificial intelligence for drug discovery and development market include Alphabet Inc., Atomwise, Inc., Benevolent AI, Cloud Pharmaceutical, Deep Genomics, Exscientia, IBM Corporation, Insilico Medicine Inc., Microsoft Corporation, and Nvidia Corporation.