A lead compound (i.e. the "leading" compound, not lead metal) in drug discovery is a chemical compound that has pharmacological or biological activity and whose chemical structure is used as a starting point for chemical modifications in order to improve potency, selectivity, or pharmacokinetic parameters.
Lead compounds are often found in high-throughput screenings ("hits") or are secondary metabolites from natural sources.
Newly invented pharmacologically active moieties may have poor druglikeness and may require chemical modification to become drug-like enough to be tested biologically or clinically.
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