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Right now you're listening to a Chasi's podcast, just getting back to manufacturing these pharmaceuticals. Has AI had much of a place here in terms of speeding things.
Up, So this AI kind of in farmer companies and in drug discovery. It's been a topic that investors are kind of increasingly focused on and increasingly excited about. And one of the key kind of themes or takeaways I would say that I really noticed when I was in the US is just how excited companies are about the
use of AI and drug discovery. Because we've already talked about how time consuming and expensive it is to develop new medicine, and what we've seen is that the developments in AI mean that you can develop new molecules around ten times as fast, or so you can design new molecules around ten times as fast. You can run simulations on those molecules around one hundred times as fast. And then there's this new concept, which I think is pretty interesting.
You've heard of the concept of a self driving car. There's this new concept of a self driving lab. And so what this means is that you have AI and then you have robotics, and so you use AI and robotics together and they drive the cycle of kind of prediction, experimentation and analysis, which means that you can iteratively identify new compounds which you then run experiments on, which then mean that the whole process is much faster and then importantly more cost effective for companies.
Gosh, So do we have any idea how much that would speed things up? We talked about ten years before being the time that it can take, I think for exclusivity, but I think you know, when you've got a meticine in the wings, that can take even longer, can't it.
Yeah, And I think it's probably too early yet to put an actual number on how much it could speed things up. But I think what we're seeing is more and more companies are talking about it, more and more companies are using it in their drug discovery process. So I think over time we'll be able to get a better sense of how much time it actually is taking
off the drug discovery process. But to the extent that it means we can develop medicines that are cheaper, I feel like that could only be a good thing given the high costs of healthcare that we're seeing around the world now.
Just thinking about investors looking to invest in the sector, I mean, there are those direct stocks, they are probably quite expensive at the moment for some people. But also what about ETFs. I know on cheeseys, for instance, we've got about five or at least there's more actually pharmaceutical ETFs that people can look to. They are mainly in the US. But also I did see that there was a couple of applications for more themed weight loss ETFs
by I think Amplify and round til investments. We're two though I don't think they've actually come to fruition yet.
So I guess when you're thinking about healthcare, healthcare itself is super broad, and then within that there's all different kinds of companies, so hospitals, medical device companies, companies that sell chemicals that are used in farmer companies that sell tools that are used in farmer, so all of that
kind of sets in the broader healthcare space. And I think if you're thinking about getting a broad kind of ETF exposure, maybe one way to get a sense of what could be better is looking back at what's happened over time. And if you look back over a significant period of time, say twenty years, the S and P five hundred Index and the S and P Healthcare Index have actually interestingly performed basically neck on neck, so they both generated around a ten percent return per year over
a twenty year time horizon. If you look at farmer itself, that generated around half a percent lower return, so around nine and a half percent over that twenty year period of time. But if you had managed to pick farmer winner Novo or farmer winner Eli Lilly over that period of time, you would have generated I think from memory it's around a sixteen percent return per ANIM and then a twenty five percent return per ANIM. Picking a winner
can be great. But then if you're looking at a diversified exposure, as she would suggest that rather than looking for a narrow farmer exposure, a broader health care exposure would be better. And then I think especially worth keeping in mind. With a diversified easier for Farmer, You're likely to have a higher exposure to the largest companies and they may have a higher proportion of medicines that are coming up to that loss of exclusivity and revenue and
revenue dropping off. So that's a really important thing to keep in mind with Farmer itself, is what is that loss of exclusivity burden and how does that sit across the companies that are in that ETA.
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