The market is awash with the talk of Artificial Intelligence (AI) and Machine Learning (ML). The most recent quarter of tech earnings had many of the “big guys” (Apple, Alphabet/Google, Microsoft, Meta) talking about their AI capabilities and where it was leading them.
In fact, just yesterday Alphabet Inc.’s (NASDAQ: GOOGL) stock surged as much as 5% after it made several AI announcements at its developer conference.
Microsoft Corporation (NASDAQ: MSFT) has invested in ChatGPT, which seems to have helped its share performance this year.
And despite the dire warnings of Elon Musk, Steve Wozniak, and the “godfather of AI” Geoffrey Hinton, it seems AI is sparking a bit of an investment frenzy, at least until something else comes along to capture the market’s attention.
AI: A Complex and Diverse Field
However, AI isn’t exactly a definitive thing. Simply stating you are using AI is a little bit like saying I’m going on a holiday. You don’t know where I’m going, how I’m getting there, or what I plan to do on my holiday.
It’s one thing to use AI to generate a viral video that sounds like a collaboration between Drake and The Weeknd and another thing to do something useful (although you may argue a viral video is a useful thing).
Even more granular, you can have an industry that is using AI to advance technology or improve efficiency but still have very different approaches or algorithms tackling a variety of unique issues. In other words, an article on AI could be way longer than anything I intend to discuss today.
Instead, I’m simply going to have a look at one example of how a company is putting its own twist on AI for the benefit of humanity and hopefully its investors.
NetraMark Holdings – A Unique Approach to AI in the Pharmaceutical Industry
That company is NetraMark Holdings Inc. (CSE: AIAI). NetraMark is a software technology company dedicated to improving the understanding of how patients, within and across diseases, relate to each other through the integration of multiple types of data via unique AI-enhancing software targeted at the Pharmaceutical industry. Its product offering uses a novel topology-based algorithm that has the ability to parse patient data sets into subsets of people that are strongly related according to several variables simultaneously. And hopefully, that’s as complex a sentence as there is in this article.
NetraMark is addressing a market where less than 12% of the candidate medicines successfully make it through the clinical trial process and receive approval from the FDA. Given all the unsuccessful biotech companies I’ve participated in, I find that a very easy statistic to believe.
NetraMark is utilizing its proprietary AI algorithm to review where trials have failed and improve the success rate (see the complex sentence above). In other words, just because a specific trial might have failed, it doesn’t mean the drug candidate wasn’t successful, it might just be that it isn’t successful for certain people but wildly successful for others. The challenge becomes using AI to figure this out.
NetraMark’s Focus on Small Data Sets
Over 95% of drug trials have less than 1,000 people participating in them, which is a pretty small data set. Typically small data sets aren’t conducive to the use of AI.
Where NetraMark is unique is that Founder, Chief Scientific and Technology Officer, Dr. Joseph Geraci has spent over 5 years developing AI algorithms that focus on deriving statistically relevant findings in small data sets. Their product provides an intuitive interface for scientists to interact with small datasets to uncover connections related to efficacy, toxicity, and placebo response. The Company has published numerous White Papers on how their technology has identified various insights on topics ranging from pancreatic cancer to Alzheimer’s disease progression to lung cancer.
Potential for Growth
And the best part for investors is, this isn’t something that is still in development. It’s functional and running today. Last week NetraMark announced the completion of a recent client engagement to utilize outcome data collected in Phase 3 clinical trials from a specialty biopharma company. This was part of a Master Service Agreement whereby the Company earned a fixed fee for a defined Scope of Work.
NetraMark is guiding toward contracts valued at C$2 to C$3 million for the current fiscal year and C$7 to over C$9 million for next year.
Acquisitions in the AI Drug Discovery Space
Of course, that assumes the Company even makes it until next year. On Monday of this week, Recursion Pharmaceuticals, Inc. (NASDAQ: RXRX), a leading clinical-stage biotech company announced it has signed agreements to acquire two companies in the AI drug discovery space: Cyclica Inc. and Valence Discovery.
What makes this relevant? In February 2022, NetraMark partnered with Cyclica Inc. to accelerate drug discovery targeting neurodegenerative diseases.
Given Cyclica is a private company, it’s hard to determine what type of multiple the $40 million price Recursion paid represents. But it does confirm that the AI frenzy is heating up.
What that means for NetraMark remains to be seen.
NetraMark Holdings trades at a current market cap of C$23 million.
FIGURE 1: NetraMark Holdings – 1-Year Stock Chart
Source: S&P Capital IQ
Editor: Dean Bristow
Dean Bristow has been involved in the North American Crude Oil business for 30 years including Energy Trading, Infrastructure Development, Transportation, and Refining. During that tenure, he spent…
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