Lead Generation and Refinement Segment, by Process or Phase to Account Largest Share in Small Molecule Drug Discovery Market during 2023-2031

According to our new research study on "Small Molecule Drug Discovery Market Forecast to 2031 - Global Analysis - by Therapeutic Area, Process/Phase, and Geography," the market was valued at US$ 50.93 billion in 2023 and is projected to reach US$ 106.77 billion by 2031; it is expected to register a CAGR of 9.7% during 2023-2031. Flourishing pharmaceutical industry with surge in R&D activities and growing inclination toward outsourcing are contributing to the small molecule drug discovery market growth. However, high drug development costs hamper market growth. Further, the growing adoption of artificial intelligence in drug discovery is expected to bring new small molecule drug discovery market trends in the coming years.

Artificial intelligence (AI) and associated technologies assist in making drug discovery cost-effective and derive quick results. It helps by offering innovative ways to collect and manage data, along with reducing dependency on manual operations. Leading biopharmaceutical companies are utilizing AI platforms to accelerate the drug discovery. For instance, Pfizer uses IBM Watson (a machine learning system) to enhance its search for immuno-oncology drugs. Additionally, Sanofi collaborated with a UK-based start-up, Exscientia's AI platform, to discover therapies for treating metabolic diseases. Moreover, Genentech adopts an AI system from GNS Healthcare to explore cancer treatments. AI tools are highly used in screening and identifying compounds and minimizing the drug interactions that may cause issues later.

With the rapid introduction of AI in healthcare, numerous pharmaceutical companies are investing in joint ventures with AI companies for the identification of drug targets and designing new drugs. Therefore, numerous partnerships between pharmaceutical industries, AI companies, and government organizations are rising globally. For instance, in 2023, Merck partnered with BenevolentAI and Exscientia to harness the power of AI-driven design and discovery capabilities, further advancing the company's research efforts. Moreover, in November 2023, Evommune Inc. partnered with Accutar Biotechnology Inc., and focused on the discovery of novel small molecule drug candidates in chronic inflammatory diseases. The collaboration is expected to leverage Accutar's proprietary AI platform as well as Evommune's expertise in the design and development of novel oral small molecule treatments against the root cause of chronic immune-mediated inflammatory diseases. Thus, AI-driven drug discovery is emerging as a significant trend in the small molecule drug discovery market.

The small molecule drug discovery market analysis has been carried out by considering the following segments: therapeutic area, process/phase, and geography. Based on therapeutic area, the small molecule drug discovery market is segmented into oncology, central nervous system, cardiovascular, respiratory, orthopedics, immunology, rare diseases, and other therapeutic areas. The oncology segment held the largest share of the market in 2023. Cancer is one of the major health problems around the world. As per the World Health Organization (WHO), in 2022, an estimated 20 million new cases of cancer were diagnosed worldwide, and 9.7 million people have succumbed to death. The rising cases of cancer are driving the demand for targeted therapies. Therefore, pharmaceutical companies are motivated to make considerable investments to discover small molecule drugs that can effectively treat different types of cancer.

By process/phase, the market is segmented into target discovery, target validation, lead generation and refinement, and preclinical development. The lead generation and refinement segment dominated the market in 2023. On confirmation of a drug target, researchers seek to identify molecules that can interact with the target to obtain desired biological reactions. A hit compound is a molecule showing the desired activity type in a screening assay. Pharmacologically relevant screening assays for hit discovery are crucial for the hit-to-lead selection process. Lead compounds are generated from various collections of hits by refining the screening criteria to enable the selection of the most promising molecules for further development. Techniques such as high throughput sequencing and others are used for lead compound generation. The results of the target validation stage can assist in lead compound generation. Lead compounds are chemical compounds that demonstrate desired biological or pharmacological activity and initiate the development of a new clinically relevant compound. The lead compounds are tested to refine or optimize their efficacy and mechanism. The objective of lead refinement is to deliver one or more candidates for evaluating GLP safety studies. The molecules obtained in the lead generation process are used as the starting point for detailed chemical modifications to improve their target specificity and selectivity. Refinement of the compounds is done by medicinal chemists using advanced organic synthesis methods or by biotechnological processes for the production of biological products. Lead identification/optimization is one of the most important steps in drug development. Once a molecule is generated, it is further checked for its ADMET (i.e., Absorption, Distribution, Metabolism, Excretion, and Toxicity) properties. If the molecule has no toxicity or mutagenicity, it can be used as a lead molecule. Further optimization improves the quality of lead molecules. As the industry increasingly emphasizes targeted therapies, the lead generation process evolves to prioritize compounds that interact specifically with validated targets, thus improving the chances of successful outcomes.

Bristol-Myers Squibb Co, Merck KGaA, GSK Plc, Boehringer Ingelheim International GmbH, Thermo Fisher Scientific Inc, ICON Plc, Danaher Corp, Charles River Laboratories International Inc, Oncodesign Services, and Revvity Inc are among the leading companies operating in the global small molecule drug discovery market.

Companies operating in the small molecule drug discovery market adopt various organic and inorganic strategies. Organic strategies mainly include product launches and product approvals. Acquisitions, collaborations, and partnerships are among the inorganic growth strategies witnessed in the small molecule drug discovery market. These growth strategies allow the market players to expand their businesses and enhance their geographic presence, thereby contributing to the overall small molecule drug discovery market growth. Further, acquisition and partnership strategies help them strengthen their customer base and expand their product portfolios.


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