Selecting 9 molecules from 49 billion: Westlake Pharma’s AI-developed COVID-19 drug receives regulatory approval

III. Scientist-led Bet Westlake Pharma is not an "AI-native" company; it is a quintessential "university-incubated" innovative biopharmaceutical enterprise, rooted in Westlake University and the Westlake Laboratory. Three co-founders: Yu Hongtao, Chairman: B.S. in Chemistry from Peking University; Ph.D. and postdoctoral fellow at Harvard Medical School. Served as Assistant Professor then endowed Chair Professor at UT Southwestern Medical Center; concurrently served as an investigator at the Howard Hughes Medical Institute (HHMI) from 2008 to 2019. Returned to China full-time in 2019 to serve as Dean of the School of Life Sciences at Westlake University and Director of the Westlake Laboratory. His research focuses on cell cycle regulation and genome stability—topics with no direct link to AI, yet he possesses deep biological insight and mastery of the foundational logic of drug development. Hu Qi, Co-founder: B.S. and M.S. in Pharmaceutical Sciences from Peking University, Ph.D. in Biology from Tsinghua University, and postdoctoral fellow at UCSF. He is a Distinguished Researcher at Westlake University and leads the Core Lab for AI-Driven Drug Design at the Westlake Laboratory. Within the team, he serves as the AI expert—and embodies the rare profile of “the most AI-savvy among pharmacologists, and the most pharmacology-savvy among AI specialists.” Huang Jing, Co-founder: Professor at the School of Life Sciences, Westlake University. In terms of equity structure, the three founders collectively hold approximately 41.6% directly; Westlake University holds ~4.6% directly—a classic “scientist-led ownership + university endorsement” model. Its financing has been low-key: near-RMB 100 million in its seed round (led by Sequoia Capital China Seed Fund, Simcere Pharmaceutical, and Sinovation Ventures), Series A (led by PuHua Capital and Westlake Sci-Tech Investment), and Series B (led by Zhejiang Provincial Financial Holding Group). Funding amounts have been modest, and the pace deliberate. Compared to AI-driven pharma startups that routinely raise hundreds of millions of dollars and rapidly scale toward unicorn valuations, Westlake Pharma operates more like a quiet, diligent workhorse. Yet this very company has delivered China’s first truly AI-assisted novel drug to complete clinical trials and receive regulatory approval. Here lies the irony: those who understand AI best aren’t necessarily the first to succeed; rather, those who deeply understand drug development—and then harness AI—move faster. Because the core challenge in drug discovery has never been “Is computational power sufficient?” but rather “How deeply do we understand biology?” AI acts as an amplifier—but only of the efficiency of medicinal chemists. And crucially, you must first *have* genuine medicinal chemists. If an AI team lacks biological literacy and fails to grasp the real-world pain points of drug R&D, even the most elegant models merely solve artificial problems. That’s why Westlake Pharma’s model deserves attention: its DNA-encoded library (DEL) platform is proprietary; AI is deployed solely to enhance DEL’s throughput. Its drug optimization pipeline is internal; AI accelerates optimization—but does not replace medicinal chemists. AI amplifies human expertise; it does not supplant it. IV. Polar Opposites On the same day that Apsiver (epclusa analog) received approval, another piece of news went viral across China’s tech community: Google DeepMind disbanded its core AI-for-Science team responsible for AlphaFold development. AlphaFold needs little introduction—In 2024, Demis Hassabis (CEO of DeepMind) and scientist John Jumper were awarded the Nobel Prize in Chemistry for AlphaFold; Jumper became the youngest Nobel laureate in Chemistry in the past 70 years.

[Biopharma Investment Primer for Beginners] Part VI: A Drug Stock Valuation & Prospects Scoring System Even Novices Can Use

For mature, commercially operational Hong Kong–listed biopharma companies, rigorous cash runway calculations are unnecessary—but one can assess their fundamental floor: sustained positive operating cash flow, with cash flow magnitude aligned with revenue and net profit. Put simply, money earned from selling drugs must be real cash in hand—not just paper profits on the books. How to differentiate: High-quality candidates: Revenue and net profit grow alongside steady growth in operating cash flow—even outpacing profit growth—indicating exceptionally high-quality earnings, highly monetized revenue, and strong valuation support. Red-flag candidates: Net profit is positive (or even slightly growing), yet operating cash flow remains persistently negative and continuously draining. This may signal poor receivables collection, excessively high sales expenses, unprofitable core operations, or reliance on non-recurring gains to prop up accounting profits—a clear sign of deteriorating fundamentals. 4) Policy-Driven Valuation Adjustment: The Invisible Pressure of China’s National Health Insurance (NHI) Hong Kong–listed domestic biopharma firms face systemic downward pressure from China’s NHI centralized procurement (“volume-based procurement”) and routine price reductions. Institutional investors dominate the Hong Kong market, which features a relatively mature valuation framework; thus, such domestically commercialized biopharma firms typically receive a “NHI discount” in valuation. Valuation adjustment logic: NHI-dependent firms: Core revenue and profits are fully tied to centralized procurement and NHI negotiations. Product prices decline annually, capping profit potential and limiting growth prospects—leading markets to apply persistent valuation discounts, with lower long-term PS and PE multiples. Globally capable firms: Generate overseas revenue, possess global commercialization capacity or business development (BD) monetization capability, and are not confined to China’s intensely competitive domestic market. They transcend the singular constraint of NHI-driven price cuts, unlocking broader growth potential and greater predictability—warranting long-term valuation premiums. Hong Kong case comparison: BeiGene (06160.HK) and WuXi Biologics (02269.HK). As of end-June 2026, overseas revenue accounted for 70.22% and 85.87%, respectively, of their trailing twelve-month revenue—making them leading enterprises with proven global commercialization and service capabilities. Unconstrained by domestic NHI policy alone, they demonstrate superior earnings resilience and growth potential versus purely domestic peers, sustaining higher long-term valuation multiples. In contrast, generic drugmakers and conventional innovators reliant solely on domestic NHI volume expansion remain chronically undervalued, unable to break through valuation ceilings. Note, however, that for overseas-focused listed biopharma firms, regional revenue concentration also matters: if the bulk of income and profit derives from geopolitically sensitive regions subject to trade restrictions, valuation may likewise be suppressed. Valuation Logic for Innovative Biotech Firms (Biotechs): Abandoning the PE Mindset Innovative biotech firms—especially those listed under HKEX Chapter 18A’s “pre-revenue, pre-profit” rules for biotechnology companies (i.e., tickers ending in “B”)—lack stable operating profits or net income. Traditional valuation frameworks (PE, PEG, net profit margin) are inapplicable. Their market capitalization reflects not current profitability, but future potential value, survival viability, asset quality, and market consensus—rendering their valuation logic fundamentally distinct from mature pharma firms. 1) Cash Value: The Absolute Floor for Biotechs (Risk Control Priority #1)

Is Westlake (WLK) Undervalued As Earnings Recovery Puts Its Valuation Back In Focus?

Aug 11, 2026

Westlake reported a return to profitability in Q2 2026 driven by higher pricing and cost savings, prompting investor debate over whether its current stock price reflects undervaluation or overvaluation.