The time for new drug development has been halved, diagnostics are more precise, and industry barriers are lowered... AI is transforming the Chinese healthcare industry

On February 26, Deutsche Bank analyst Cyrus Ng released a report stating that the entire Chinese healthcare industry will benefit from the AI revolution, from drug development and diagnostics to hospital management.

Deutsche Bank indicated that the application of AI will help improve efficiency in the healthcare industry, save costs, and overcome barriers that traditional methods cannot break through, entering areas that traditional methods cannot reach. Moreover, with the improvement in efficiency, certain medical tasks and procedures may be replaced by AI.

Deutsche Bank also reminded that, as AI applications lower the entry barriers in the industry, more competitors are expected to enter this field.

Since the beginning of the year, driven by positive sentiment surrounding the rapid development of AI in China, the stock prices of Hong Kong-listed internet healthcare-related companies have risen by over 41%, significantly surpassing the Hang Seng Index's increase of 19%.

According to Frost & Sullivan's forecast, the global market for AI solutions in the healthcare industry is expected to grow at a compound annual growth rate (CAGR) of 35.5%, increasing from USD 13.7 billion in 2022 to USD 155.3 billion by 2030.

Since the end of January, more than 25 well-known Chinese healthcare companies have announced partnerships with DeepSeek, including Hong Kong-listed AI drug discovery company XtalPi and leading pharmaceutical company CSPC.

Shortening Drug Development and Investment Cycles

Deutsche Bank believes that AI will play an increasingly significant role in the healthcare field, especially in drug development, shortening both drug development and investment cycles.

Specifically, AI is expected to redefine the drug discovery industry, reducing cumbersome, repetitive, and labor-intensive tasks while lowering technical barriers in drug development, thus reducing the time and cost of new drug development.

Furthermore, due to improved efficiency and potential increases in success rates, the investment cycle for drug development will shorten, attracting more capital into the drug development field.

AI Revolutionizing the Drug Discovery Industry

Deutsche Bank stated that drug development is a systematic process of identifying and developing new drugs, requiring interdisciplinary talent to design safe, effective, and commercially viable drugs. This process is complex and time-consuming, traditionally relying on labor-intensive techniques such as trial-and-error experiments.

Generally speaking, although the development cycles for various types of drugs differ, it typically takes 10-13 years from the research phase to the clinical phase, with the entire development process usually requiring over USD 1 billion in investment.

The drug discovery process begins with screening 5,000-10,000 compounds, with about 250 compounds entering preclinical trials, and ultimately fewer than 10 compounds making it to the clinical stage, of which usually only one receives approval.

AI technology can significantly reduce the time and cost required, improving the efficiency of the drug discovery process.

Currently, AI-driven drug discovery can shorten the required time to 30 months, saving half the time. Deutsche Bank expects that with the application of AI, the entire drug discovery process will be shortened to 8-10 years.

AI-assisted diagnosis, helping hospital operations

Traditional diagnostic methods require clinicians to identify diseases through medical imaging or analysis of tissue samples. Due to the variability and subjectivity of human interpretation, subtle changes may be overlooked, increasing the likelihood of misdiagnosis or missed diagnosis.

However, AI can assist in the diagnostic process by analyzing data, extracting results, and providing clear diagnostic insights, helping doctors diagnose many common and even rare diseases more accurately.

In addition, Deutsche Bank also believes that the application of AI in the daily operations of hospitals will become increasingly common.

AI can help organize and manage the vast amounts of data generated daily in hospitals, including patient data, examination records, prescription records, appointment schedules, and resource allocation. AI can also promote more efficient hospital management by organizing data, providing quick summaries of patient records, highlighting specific conditions, and reminding patients about medications or appointments