Reid Hoffman thinks people are sleeping on one of the biggest potential moneymakers in AI.
The LinkedIn cofounder said there is a significant revenue opportunity in investing in companies using AI in medicine on an episode of ‘The Possible Podcast’ on Wednesday.
“Now it’s the time for medicine,” Hoffman said. “They’re googly-eyed about the … Anthropic revenue thing. And medicines are massively larger TAMs [total addressable markets].”
Hoffman said he believes the AI chatbot boom already has its leading players, such as OpenAI and Anthropic.
He said people wanting to make money should look at AI in medicine, which, as a market, has greater size potential.
The time it takes between identifying a drug and rolling it out on the market is lengthy and can take over 10 years. That’s if it makes it through clinical trials.
Hoffman is the cofounder of Manas AI, a New York-based biopharmaceutical company that uses AI models to discover medicines and bring them to the market.
The company aims to make this process more efficient by using AI to bolster early-stage research before devoting resources to research and development.
“What we’re doing at Manas is creating a drug discovery factory for monopolies because drugs are essentially legal … 20-year-long monopolies,” Hoffman said.
The term of a new patent is 20 years from the date on which its application was filed in the US. Depending on the type of drug, the FDA can grant varying lengths of market exclusivity.
For a drug used for a rare disease or condition, this can be 7 years long.
Like Manas AI, many AI start-ups have emerged in the biopharmaceutical space since the COVID-19 pandemic, offering solutions to reduce the cost and time required to get medicines to the people who need them.
Hoffman disagreed that it’s a winner-take-all market.
“Think about the number of different providers of GLP1 drugs,” he added. “There are a number of different providers. All of them are in the tens of billions of revenue.”
“So, it’s very possible to have a monopoly on your drug and have other drugs even in the same space in it to be really, really lucrative,” he added.
Hoffman said the real opportunity lies with companies using AI to discover and develop the next generation of medicines.
“The question is what other things are there to be discovered?” he said.
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