Hot Topic: AI vs AI: The New Chess Game in Biotech Investment
How are biotech investors using AI to select investments? And how are biotechs themselves using AI to present themselves in the best light?
These were some areas covered in a fascinating panel discussion at Optimum’s 18th Annual Healthcare Investment Conference, held at the King’s Fund in early October.
And what emerged, is that what’s happening is something like a game of chess.
Ed Kliphuis of VC investor Sofinnova Partners said they are using their in-house platform Sofia to try to identify principal investigators who are underappreciated “rising stars”.
Individuals whose true value hasn’t yet been reflected in their price, you might say.
They also use it to sift through pitch decks, and also analyse decades of experience to spot patterns they can learn from, in terms of what factors predict a successful investment.
On the other side of the fence, Phillip Brainin – once a VC himself at Sound Bioventures, now CEO of UK-based biotech Isomab – said they used it to check their pitch decks before sending them to investors.
Now, they aren’t using it just to check the deck gets their message across to humans.
They are also using it to find out if AIs are “reading” their decks properly, or if they are missing or misunderstanding any of their content.
So they are using AI to check if AI can understand their decks!
Secondly, and a little cheekily, Phillip admitted their pitch deck now contains a page which covering the answers to the top 5 questions they expect to get asked by investors – or rather, by the investors’ AIs! He calls it an “AI Q&A”.
He said he knew investors were using AI to generate questions because a lot of the time they got questions that were exactly the same, “word for word”.
Having such an AI Q&A page enables them to skip to questions 6, 7, and 8 – which are presumably a bit more original.
This example illustrated a problem Ed mentioned – that if everyone uses similar AI tools, then everyone will arrive at the same conclusion.
Or as he put it, there would be “regression to the mean” – which would eliminate what every investor strives for, namely standout investment performance.
So for now at least, it seems that there is still a place for humans in biotech investment – to ask original questions and to make the final decision.
But those who don’t use AI tools – to screen their investment opportunities, and to make sure they are getting their message across – risk getting left behind.
