INSILICO's IPO heat remains unabated as it signs another $888 million deal

INSILICO has not yet achieved profitability, and its revenue is highly dependent on major clients, with performance significantly fluctuating based on the confirmation timing of BD transaction down payments. Key Points: The cornerstone investor lineup in the IPO spans pharmaceutical leaders, tech giants, sovereign funds, and large asset management institutions, providing strong capital endorsement for INSILICO. The core self-developed product Rentosertib is regarded as one of the fastest progressing AI drugs globally. Molly At the beginning of 2026, the AI pharmaceutical leader INSILICO (3696.HK) announced its latest major collaboration, reaching a multi-year R&D partnership with the French independent pharmaceutical company Servier, with a total amount of up to $888 million. At the end of 2025, INSILICO became the company with the highest fundraising amount in the Hong Kong stock market for biomedicine IPOs in 2025, raising HKD 2.277 billion. The collaboration with Servier marks INSILICO's first significant BD transaction since its listing on the Hong Kong stock market. According to the agreement, INSILICO will leverage its self-developed AI-driven drug discovery and development platform Pharma.AI, combining it with Servier's global expertise in oncology drug development, focusing on the discovery and development of innovative oncology therapies. This collaboration adopts a risk-sharing and revenue-sharing model, with INSILICO receiving an upfront payment of up to $32 million and recent milestone payments, while Servier will jointly bear the R&D costs and lead subsequent clinical validation, regulatory communication, and global commercialization after successfully nominating promising candidate drugs. Before this collaboration announcement, INSILICO completed its listing on the main board of the Hong Kong Stock Exchange on December 30, 2025, with an issue price set at HKD 24.05 per share, raising a total of HKD 2.277 billion. INSILICO's IPO performance was outstanding, with the Hong Kong public offering portion recording approximately 1,427 times oversubscription, locking in over HKD 328.3 billion, setting the highest subscription record for non-18A Hong Kong stock medical health IPOs in the year. The enthusiasm for subscriptions in the public market highlights the high recognition of capital for the AI pharmaceutical sector, and the lineup of cornerstone investors is also impressive, with 15 top global investment institutions including Eli Lilly, Tencent, Temasek, Schroders, UBS Asset Management, Huaxia Fund, and Taikang Life collectively subscribing for $115 million, with institutional backgrounds spanning pharmaceutical leaders, tech giants, sovereign funds, and large asset management institutions, providing strong capital endorsement for INSILICO. Financial Performance Still Faces Challenges INSILICO was established in 2014, and its business model mainly includes drug discovery and pipeline development, software solutions, and other discoveries related to non-pharmaceutical fields. Among these, drug discovery and pipeline development is the company's main source of revenue, contributing about 90% of revenue, with its core being the AI-driven drug discovery and development platform Pharma.AI, which provides end-to-end services including new target identification, small molecule generation, and clinical outcome prediction, covering the entire drug discovery and development process The company's software solution business involves authorizing clients to use the Pharma.AI platform and charging subscription fees; the Pharma.AI platform can also be used in other industries such as advanced materials, agriculture, and nutritional products. Compared to traditional drug development models, the Pharma.AI platform significantly enhances early-stage research efficiency. The prospectus reveals that under the traditional model, it takes an average of 4.5 years for a candidate drug to progress from target discovery to confirmation as a clinical candidate, while INSILICO has shortened this cycle to 12 to 18 months using its Pharma.AI platform. Among the product pipeline driven by artificial intelligence at INSILICO, 10 molecules have already received clinical trial approval. The fastest progressing core self-developed product, Rentosertib, is a potential world-first candidate drug for the treatment of idiopathic pulmonary fibrosis, expected to enter Phase IIb/III studies in China in the first half of 2026. This drug is also regarded as one of the fastest progressing AI drugs globally. Previously, INSILICO has entered into three pipeline licensing collaborations with Exelixis (EXEL.US) and Menarini, with a potential total transaction value of nearly $2 billion. At the same time, INSILICO has also established joint research collaborations with globally renowned pharmaceutical companies such as Sanofi, Eli Lilly, and Fosun Pharma, and has engaged in target discovery collaborations with major global pharmaceutical companies like Novo Nordisk, Boehringer Ingelheim, and Pfizer. As of the end of June 2025, there are 61 clients collaborating on drug discovery. Despite the highly attractive business model, INSILICO has yet to achieve profitability, and its revenue is highly dependent on large clients, with performance significantly fluctuating based on the timing of the recognition of upfront payments from BD transactions. From 2022 to 2024, the company's revenue grew from $30.147 million to $85.834 million, while net losses narrowed from $222 million to $17.096 million during the same period. However, in the first half of 2025, the company's revenue decreased by 54% year-on-year to $27.456 million, with net losses reaching $19.215 million