The global AI in drug discovery market is distinguished by the presence of numerous global, regional, and local players catering to AI in drug discovery techniques that are evolving at a rapid pace. Furthermore, the growing R&D in the pharmaceutical industry is further driving the growth of global AI in drug discovery market during the forecast period. The major players have adopted a strategy of obtaining regulatory approval from government agencies for their products and signing contracts and agreements to broaden their reach and reduce operational costs. For instance, in September 2019, Atomwise Inc. (US) collaborated with Hansoh Pharma (China) to design and discover potential drug candidates for up to eleven undisclosed target proteins in multiple therapeutic areas.
The global AI in drug discovery market is extremely competitive, with players competing, partnering, and investing heavily in research and development to gain a significant market share. The market is moderately fragmented with rising competition, increasing collaborative partnerships, and other strategic decisions to achieve operational efficiency.
Mergers and collaborations were also observed to expand the company's service portfolio, as well as introduce new software and services. The growth of prominent industry players is dependent on various factors, such as market conditions, government support, and industry development. Key manufacturers in the AI in drug discovery market are focusing on developing software and services with advanced technologies. It is also projected that a rise in the investments for R&D will also boost the market's growth in the upcoming future.
With respect to the current scope of the report, Alphabet Inc. (US) is the top player in the global AI in drug discovery market due to its strong software and services offering. Microsoft Corporation (US) is the second major player, followed by IBM (US), Insilico Medicine (China), Cyclica (Canada), BenevolentAI (UK), Exscientia (UK), Atomwise Inc. (US), Deep Genomics (Canada), and Cloud Pharmaceuticals Inc. (US).
Threat of New Entrants
Any manufacturing company trying to enter the market is required to accept and abide by the mandatory regulatory standards set by regulatory bodies such as the Food and Drug Administration (FDA), the European Medicines Agency (EMA), the European Centre for Disease Prevention and Control (ECDC), and others across the globe. Moreover, it may be difficult for new firms to get into this industry due to the brand image of existing large corporations as well as the shortage of an AI workforce, which puts buyers under pressure to purchase existing brand products. However, the fact that a huge number of start-ups are working on and launching products to solve problems such as protein folding, and synthetic accessibility shows that the threat of new entrants in this market is moderate.
Bargaining Power of Suppliers
There are several players at the same time, and consumers are largely at fault because of the increasing incidences of chronic diseases. AI tools reduce the time and cost of drug development, making it easier for suppliers to establish themselves in the market. Furthermore, manufacturers of AI devices and machines used in drug discovery place a premium on the uniqueness of their products in terms of qualitative and quantitative measurement. There is no replacement of the product until the process for drug discovery is finished, as the platform installation cost is also high. So, once the product is installed, there are fewer opportunities to replace the AI devices and machines until the product shows any accuracy problems.
Threat of Substitutes
Substitutes pose a moderate threat in the global AI drug discovery market due to replacing devices and machines with another brand if the existing AI tools exhibit accuracy issues. There is also a slight price difference between the AI tools of competitors. There are several manufacturers in the market, as well as a huge number of start-ups that are offering the platforms at a slightly lower cost than the large corporations. Moreover, there are moderate chances of product replacements as it is based on accuracy and precision, deals with patient life, and are used at a large scale to discover drug molecules.
Bargaining Power of Buyers
The low number of manufacturers compared to consumer demands puts buyers under pressure to purchase AI tools. This is because if buyers miss out on purchasing products, they will be delayed in carrying out their organization's processes. Furthermore, the manufacturer is unable to supply them at the time of their requirement due to a large number of consumers. There are products available in the market from competitors with the same accuracy and precision. However, there will be no brand switching because, once the devices and machines have been installed, they will be suited to the product operating person of that particular organization. Nonetheless, the market players' product costs differ slightly, but the organization continues to use a same brand of product until it discovers inaccuracies and the workforce's inability to operate the instruments. Moreover, as per the research, organizations use the same brand of products continuously because AI tools require a talented workforce. Once it is suited to the organization's workforce, there are minor chances to replace the product due to shortages of AI workforces. Therefore, the consumer keeps purchasing that same brand for several years.
Intensity of Rivalry
The demand for AI tools for drug discovery is high, owing to the huge patient population across the globe, the rising incidences of communicable and non-communicable diseases, and the rising demand for precision medicine. There are many start-ups that are introducing slightly lower-cost products than the existing brand's products. However, there is a high shortage of AI-skilled professionals, which further puts buyers under pressure to keep purchasing the same brand of product. As well, once the buyer installs the AI platform for drug discovery, it will continuously use that platform owing to the high price of installation. Hence, the high cost of installation and shortage of AI further increase the demand for the same brand, and the competition among players is overall moderate.
