It's been a rough few years for investors excited about new biopharmaceutical companies that use artificial intelligence (AI) to select new drug candidates. Less than three years after raising $510 million in its initial public offering, Exscientia (NASDAQ: EXAI) has thrown in the towel and agreed to merge with Recursion Pharmaceuticals (NASDAQ: RXRX), another AI-driven drug developer.

In a nutshell, these businesses are trying to convince big pharma that their AI technology can pick successful new drug candidates at a higher rate than traditional discovery methods. Their stock prices are way down because there isn't much clinical evidence yet to back up their claims.

Evidence that AI-fueled drug discovery is the way forward is hard to find now, but that could change in 2025. After merging with Exscientia, Recursion will have 10 clinical readouts to look forward to over the next 18 months.

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Source Fool.com