AI’s sector-level usage cases are expanding at a feverish pace. So it pays to remember that one of the early non-tech adopters of AI was healthcare. As is the case across the AI landscape, that theme is still in its infancy. That relative youth could pay dividends for patient, long-term investors.
Among ETFs, the WisdomTree Artificial Intelligence and Innovation Fund (WTAI) could be an attractive option for investors looking to capitalize on the AI/biotechnology combination – one that’s already bringing new efficiencies to the drug development process while helping biopharma companies bolster research and development (R&D) functions.
WTAI holds 75 stocks at weights ranging from 0.63% to 2.38%. The fund’s roster primarily comprises AI enablers. Those enabler firms market services and technologies to adopters, which include biotechnology firms.
Some WTAI Holdings Already Flexing Biotech Muscles
None of WTAI’s marquee holdings can be considered dedicated healthcare companies. However, some are already making their presence felt in the biotech arena. Take the case of Google parent Alphabet (GOOG). The company’s DeepMind and Isomorphic Lab recently announced an exciting advancement in the form of AlphaFold 3. This can improve drug discovery and enhance efficiencies in the complex realm of molecular biology.
“A standout feature of AlphaFold 3 is its precise prediction of interactions between proteins and small molecules, holding immense potential for drug discovery. To facilitate its adoption, Google DeepMind has launched AlphaFold Server, offering free access to researchers worldwide. This democratization of cutting-edge computational tools empowers scientists to accelerate discoveries and advancements,” according to WisdomTree research.
Predictive Potential
AlphaFold 3 has the potential to be predictive when it comes to molecular diseases, which could pave the way for biotech companies to develop targeted treatments that enhance patient outcomes. While it’s a new technology, it signals that there are ample relevant use cases for AI in the biotech industry.
One of those is bringing new efficiencies to drug discovery and approval, both of which are costly and time-consuming. With the notable exception of the COVID-19 vaccines, the typical drug approval process is usually measured in years, or even a decade. That confirms the AI/biotech intersection is certainly pertinent.
“Biotechnology is not seeing new drugs and therapies going out to 100 million people in two months. A typical drug discovery process can be roughly 14 years, cost roughly $1 billion and have a success rate, meaning a chance of getting through all the relevant trials, of around 5%,” added WisdomTree.
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