Advertisement
Advertisement
Medicine
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
A View of XtalPi’s Shenzhen headquarters. Photo: Handout

Exclusive | XtalPi rides on AI to expand into materials science as Tencent-backed pharma firm plans expansion in Shanghai, Hong Kong

  • Company aims to apply AI and automation to discovery of new industrial materials, a key strategic priority for China
  • The Tencent and Softbank-backed firm plans to expand its Shanghai facilities by ‘several times’ but has no IPO plans, co-founders say
Medicine

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.

Shuhao Frank Wen, co-founder and chairman of XtalPi. Photo: Handout

“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.

01:33

Chinese drug makers boost production of fever medicine as Covid-19 cases surge

Chinese drug makers boost production of fever medicine as Covid-19 cases surge

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.

Ma Jian, co-founder and CEO of XtalPi. Photo: Handout from XtalPi

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.

Victor Li’s CK Life partners Chinese medtech firm to develop cancer vaccines

XtalPi’s rapid growth has paralleled the widespread adoption of AI in drug development, as the technology has over the past few years proved its ability to accelerate research and development while reducing failure rates and costs.

The company plans to enlarge its regional headquarters in Shanghai and expand from a minimal presence in Hong Kong so that the office can serve as a bridge between mainland China and Hong Kong, the broader Asia-Pacific and the US, according to Wen. The company will also increase its presence in other as-yet-unnamed Chinese cities with booming biomedicine development.

XtalPi’s Shanghai site will grow by “several times” from its current size, Wen said, without elaborating on specifics. The company’s Shanghai facility occupies around 6,000 square metres. Accommodating its China, Hong Kong and Taiwan business centre and centre for drug innovation R&D, the Shanghai team is building XtalPi’s largest lab cluster, according to the company, to serve clients in China’s more developed eastern Yangtze River Delta.

“Hong Kong is a place that we pay much attention to,” Wen said, citing favourable policies to drive the growth of the biotechnology industry and local high-level talent. “In the next one to three years, the investment [in Hong Kong] will be closer to the size of Shanghai or even larger.”

The company has no solid plan to go public imminently, said CEO Ma. Its future capital-market moves will “depend on changes in the capital market”, he added.

Post