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Viva Biotech: The AI-Powered Biotech Play Set to Dominate Asia’s Next Wave of Innovation

Philip CarterTuesday, May 13, 2025 7:41 pm ET

20min read

Asia’s biotech sector is on the cusp of a revolution, and Viva Biotech Holdings (Stock Code: 01873) stands at its epicenter. Leveraging a groundbreaking Structure-Based Drug Discovery (SBDD)-AI platform, strategic partnerships with global investors like Temasek, and the impending spin-off of its CRO business to China’s A-shares market, this penny stock is primed for a valuation re-rating. Here’s why investors should act now.

1. The Technological Moat: SBDD-AI Integration Redefines Drug Discovery

Viva Biotech’s crown jewel is its AI-driven SBDD platform, a fusion of computational power and experimental validation that outpaces traditional drug discovery methods. By analyzing over 82,716 protein structures—many never documented in the Protein Data Bank—the platform identifies novel drug targets, accelerates lead optimization, and reduces timelines by 30–50%.

Key advantages:
- Target Identification: 2,098 unique drug targets cataloged, with 112 newly identified in 2024, including unexplored cancer and mRNA stability pathways.
- PROTAC & Molecular Glue Expertise: Delivered 140 ternary complex structures for targeted protein degradation therapies, a niche area with minimal competition.
- Generative AI & Supercomputing: Partnerships with the Shanghai Supercomputing Center enable high-throughput simulations, slashing costs while expanding into modalities like Xenobiotic Drug Conjugates (XDCs) and RNA-targeting small molecules.

This platform isn’t just an asset—it’s a moat. Competitors lack Viva’s cross-platform integration of AI, DNA-encoded libraries, and CMC (Chemistry, Manufacturing, Controls) expertise, which collectively boost margins to 40%+ on high-value projects.

2. Financial Turnaround: Profit Soars 956% YoY—Sustainability Proven

Viva’s 2024 results are a masterclass in turnaround strategy:
- Net Profit: RMB222 million (up from losses in 2022), driven by 956% YoY non-IFRS net profit growth in H1 2024.
- Cost Efficiency: Reduced R&D spend as a % of revenue to 15% (vs. 25% in 2022), thanks to AI’s role in minimizing trial-and-error.
- High-Margin CMC Projects: Generated 10.87% of CRO revenue in 2024, with clients like Pfizer and Novartis relying on Viva’s expertise for complex drug conjugates.

The $10M+ revenue from AI-enabled projects and 100% retention rate among top CMC clients confirm this isn’t a one-off surge—it’s structural.

3. Strategic Moves: Temasek Backing & A-Shares Listing Create Liquidity Catalysts

Viva is no longer just a CRO—it’s a capital-light, high-growth biotech engine.

Temasek-Led Funding: In 2023, the firm raised US$150M via equity sales to Temasek and HLC, signaling confidence in its A-shares spin-off plan for its CRO business. The subsidiary, Viva Shanghai, completed joint-stock conversion in 2024—a prerequisite for listing on China’s STAR Market, which prioritizes tech-driven firms.
Portfolio Exits: Proceeds from exits like Focus-X (RMB144 million) will fund AI infrastructure and global expansion, including its new Boston branch to tap into U.S. partnerships.
Regulatory Credibility: Its subsidiary Langhua Pharmaceutical passed a U.S. FDA inspection in 2025, validating manufacturing standards and unlocking U.S. market access.

The A-shares listing is the ultimate catalyst. A successful spin-off could unlock RMB5B+ in market cap, as domestic investors snap up shares of a firm dominating protein structure analysis—a critical pillar of China’s “innovation-driven” healthcare policy.

4. Market Positioning: Dominance in Undruggable Targets & Global Reach

Viva isn’t playing in a niche—it’s defining one:
- Global Protein Structure Leader: Its database of 82,716 structures gives it a 5–10 year lead in targeting undruggable proteins, a $50B+ opportunity.
- Diversified Revenue Streams:
- CRO/CDMO Synergy: Langhua’s expanded capacity (1,260 cubic meters by 2025) ensures seamless scale-up for AI-designed drugs.
- High-Margin Modalities: XDCs and PROTACs command 40–60% gross margins, with 157 active AIDD projects in 2024.
- Geographic Expansion: European and U.S. revenue grew 60% YoY in 2024, leveraging partnerships with Riparian Therapeutics and DTx Pharma.

The Case for Immediate Action

Viva Biotech is a high-risk, high-reward bet for investors willing to look past short-term volatility. Near-term catalysts—the A-shares listing, FDA-backed credibility, and AI-driven profit growth—position it to outperform peers.

At current valuations (P/E ~15x vs. industry averages of 30–40x), this is a contrarian opportunity. The risks? Regulatory delays in China or U.S., and execution on the spin-off. But with $144M in exit proceeds and Temasek’s backing, the upside—potentially 300%+ over 2 years—far outweighs the downside.

Invest now while the valuation is still undemanding. The next wave of Asia’s biotech boom is here, and Viva is steering it.

Disclaimer: Always conduct independent research and consult a financial advisor before making investment decisions.

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