AI Drug Sector Mania Is Starting On FDA Announcement Of Replacing Animal Testing With AI-based models

[https://www.reuters.com/world/us/us-fda-phase-out-animal-testing-drug-development-2025-04-10/](https://www.reuters.com/world/us/us-fda-phase-out-animal-testing-drug-development-2025-04-10/)

**TLDR:** FDA is Ditching Drug testing on animals for AI Drug Models — ABSCI, $RXRX, and $SDGR Bull Run has just started. IMO that this is the year for AI Drug Discovery and it reminds me of how quantum stocks rose.

So the FDA announced Last Thursday that they’re beginning to phase out animal testing for drug development, and replacing it with AI models to simulate how drugs behave in the body, and lab-grown human organoids (little fake livers and hearts made in the lab).

Companies that provide strong non-animal safety data might even get faster FDA reviews.

AI Drug Discovery Stocks started to move on Friday:

* ABSCI Up 13%
* $RXRX up 25%
* SDGR up 17%

Here’s why this is a big deal. AI platforms can drastically reduce the time and cost it takes to develop a new drug. Instead of running lengthy and expensive animal trials, drug companies can now use simulations and organ-on-a-chip models to predict how a drug will behave — and potentially get those results accepted by the FDA. That alone makes these AI tools way more attractive to big pharma(Leading them to outsource to these companies their R&D).

So for Big Pharma it would be very cheap to partner with or license technology from Absci, Recursion, or Schrödinger to run their research of future potential drugs. This adds a new revenue stream for these AI Discovery companies through licensing deals, research collaborations, and long-term co-development partnerships. **Think of it like how Amazon Web Services let companies skip building their own servers — now drugmakers can skip building their own AI drug discovery stack.**

Also, with the FDA giving the green light to non-animal testing, these AI drug discovery companies just became way more attractive as **buyout targets** for big pharma. Instead of building their own AI infrastructure from scratch, it’s now faster and cheaper for legacy pharma giants to just **acquire** platforms like $RXRX, ABSCI, or $SDGR and plug them directly into their pipeline. This regulatory shift makes M&A not only more appealing — but way easier to justify to shareholders.

This is not financial advice, I’m not a financial advisor — just sharing my personal opinion for entertainment and discussion only. Do your own research.

[Position](https://preview.redd.it/ttgs3mtlxtue1.jpg?width=1320&format=pjpg&auto=webp&s=6994856c579429095da378b7425f82f39a46a7e1)