Chinese pharma firm uses AI to find new industrial materials

Pharmaceutical technology company XtalPi is expanding its focus beyond the development of medicines into the improvement and discovery of industrial materials, an increasingly critical area of focus for China and other countries around the world.

The unicorn, backed by Tencent Holdings, SoftBank Group and Sequoia Capital among other investors, also plans to expand its presence in Hong Kong and Shanghai to drive its growth, its co-founders told the South China Morning Post.

“We hope to become a new kind of company with an entirely new paradigm that drives pharmaceutical innovation and new-materials discovery,” said Wen Shuhao, co-founder and chairman of XtalPi in an interview.

The Shenzhen-based company is exploring the use of AI, robotics, autonomous labs and quantum physics in the quest to discover new materials. Initially the company is focusing on finding clients who can work with the firm to successfully land related projects or products, the executives said.

“We aim to become an AI and automation-driven industrial platform to help industrial upgrading,” said Ma Jian, co-founder and CEO of XtalPi.

The ambition aligns with China’s goal of advancing its raw-materials industry – including metals such as lithium and nickel, chemicals, and construction materials – to lead the world by 2035.

The field includes both traditional materials enhanced with new properties and newly created materials. Advances in such materials could impact a great many industries including electric cars, semiconductors and green construction.

China’s new-materials industry is expected to reach 10 trillion yuan (US$1.48 trillion) by 2025, with a compound annual growth rate of 13.5 per cent, according to a forecast by Shenzhen-based consultancy Zero Power Intelligence.

XtalPi has emerged as one of the earliest AI drug discovery companies in China, trailing earlier peers in developed countries such as the United States.

The three co-founders – Wen, Ma and chief innovation officer Lai Lipeng – created XtalPi in 2014 when they were postdoctoral fellows at the Massachusetts Institute of Technology (MIT). They registered the company in Shenzhen in 2015.

The company attracted Series C investments of US$319 million in September 2020, a global record in the segment at the time, according to media reports, amid the ravages of Covid-19.

XtalPi has established collaborations with more than 200 drug makers globally, ranging from international leaders Johnson & Johnson’s Janssen Pharmaceuticals and Roche to domestic peers such as Hong Kong-listed Sino Biopharmaceutical subsidiary ChiaTai Tianqing Pharmaceutical Holdings and CK Life Sciences.

The company has used its technologies to aid pharmaceutical giant Pfizer in identifying and validating new drug compounds, including speeding up the creation of Paxlovid, the first oral drug for Covid-19 to receive US Food and Drug Administration approval, to six weeks from the usual time frame of several months. South China Morning Post