In Depth: Smash IPO Doesn’t Shake Investors’ AI Pharma Doubts

While QuantumPharm’s Hong Kong listing was a blockbuster, observers remain cool on the industry’s long-term profitability

Drug researcher QuantumPharm Inc. recently made headlines for becoming the first-ever Chinese artificial intelligence (AI) pharma company to go public and the first firm to list under a new rule that aims to encourage more tech IPOs.

Many saw the listing, reportedly Hong Kong’s third-largest this year, as a welcome sign that investors were beginning to take an interest in AI pharma again after a prolonged funding drought.

Shortly after the Tencent Holdings Ltd.-backed company’s June IPO, several of QuantumPharm’s domestic peers secured new funding totaling millions of dollars, reinforcing this speculation.

However, several investors told Caixin that, overall, investors remain cautious as they’re uncertain if AI pharma will turn out to be highly profitable — no AI-designed drugs have yet entered the market and companies in the space are struggling to narrow their losses.