Smart Thinking on AI in Healthcare Part 4: Biopharma Global Insights 1 We believe AI is especially important for biopharma, because AI can understand biology in a way humans cannot. The reason that ChatGPT is so impressive is that the underlying Transformer technology can “understand” ordinary languages like English. Transformers can also “understand” large bio-molecules like proteins. Traditionally drug development has involved informed trial and error to discover molecules, followed by long, expensive clinical trials, in which more than 90% of drugs fail. With AI drug development can move closer to drug design, speeding up the process and creating better-targeted drugs. Clinical trials can move from exploring the properties of a molecule that has been discovered to confirming that the design works as intended. This is likely to shorten their duration, and make the likelihood of success much greater. Biopharma moves slowly, but over time we believe it will be disrupted more by AI than almost any other industry. “We are reimagining the entire drug discovery process from first principles with an AI-first approach” – Demis Hassabis, founder and CEO of Deep Mind, and CEO of Isomorphic, an Alphabet subsidiary, which aims to bring AI to healthcare. “The use of artificial intelligence and data science already support our teams’ efforts in areas such as accelerating drug discovery, enhanced clinical trial design, and improving manufacturing and supply of medicines and vaccines. We have just scratched the surface as to how we embrace these disruptive technologies.” – Paul Hudson, CEO of Sanofi “AI doesn’t represent an incremental change; it’s going to fundamentally change how drug discovery works” – Neal Batra, Deloitte Consulting Principal and Future of Health leader. “What I get most excited about is the potential for AI to fundamentally change the timescales, as well as the cost structures, for development in the therapeutic space.” – Vineeta Agarwala, Andreessen Horowitz General Partner focussing on therapeutics, diagnostics and digital health at the bio+health fund Executive Summary Adam Spielman +44-20-7986-4211 adam.spielman@citi.com Wenyan Fei wenyan.fei@citi.com