Outline:
Major Breakthrough in AI-Driven Drug Discovery
Shares of XTalPi, a Shenzhen-based artificial intelligence (AI) company specialising in drug research, experienced a significant surge following a major deal with a biotech firm founded by a Harvard University chemist known for his entrepreneurial success. The stock rose as much as 23 per cent, marking a notable milestone for the company.
The collaboration was announced after DoveTree, a firm established by Professor Gregory Verdine, signed a definitive agreement with XTalPi in late June. According to a filing with Hong Kong’s bourse, this partnership grants DoveTree exclusive worldwide rights to develop and commercialise drug candidates discovered by XTalPi. Verdine, described by Harvard as a pioneer in chemical biology and a distinguished serial entrepreneur, has a history of founding multiple biotechnology companies.
As part of the agreement, DoveTree committed to paying XTalPi $100 million within 180 days of signing, with $51 million already paid. Additionally, XTalPi could receive up to $5.89 billion if the drug candidates meet regulatory and commercial milestones, along with royalties based on a single-digit percentage of annual net sales.
XTalPi’s AI-driven drug discovery platform utilises integrated “AI + robotics” technology to identify and develop small-molecule and antibody-based drug candidates. These will focus on targets selected by DoveTree, primarily in oncology, immunologic and inflammatory diseases, neurological disorders, and metabolic dysregulation.
The company’s self-developed large language model (LLM) has significantly improved the success rate of chemical experiments, increasing it from 20 to 30 per cent to 90 per cent. This advancement, according to Zhang Peiyu, the chief scientific officer, highlights the potential of AI in revolutionising drug development. LLMs are the backbone of generative AI services like ChatGPT.
The integration of robotics and AI is expected to reduce drug discovery timelines from four years to just one or two years, according to Zhang. This efficiency could lead to faster development of life-saving treatments.
Verdine is well-known for his work on the molecular mechanism of epigenetic DNA methylation, which is linked to various diseases, including cancer. He has founded or co-founded over 10 biotechnology companies, with three therapies he spearheaded receiving approval from the US Food and Drug Administration.
This deal between XTalPi and DoveTree is part of a growing trend of drug-licensing collaborations between Chinese research firms and international pharmaceutical companies. China’s pharmaceutical out-licensing value reached nearly $66 billion in the first half of 2025, surpassing the total for the entire previous year.
For multinational companies, these deals offer exclusive products to expand their drug-candidate pipelines, while Chinese developers benefit from prior investments and funding for new projects. A recent example includes GlaxoSmithKline potentially paying Jiangsu Hengrui Pharmaceuticals $12.5 billion for exclusive global rights to develop and market a dozen drugs, marking the largest licensing deal for Chinese drug developers.
Over the past five years, AI-assisted efforts have gained momentum in China’s healthcare industry due to technical advancements, policy incentives, and capital investment. Analysts at Jefferies highlighted this growth in a report from June.
XTalPi has collaborated with several global pharmaceutical giants, including Merck, Johnson & Johnson, Pfizer, and Eli Lilly. The company continues to position itself as a key player in the evolving landscape of AI-driven drug discovery.