1. Target Identification: In this step, the focus is on understanding the molecular mechanisms behind a particular disease. The target protein that is responsible for the disease is identified, and its structure and function are studied.

2. Virtual Screening: In this step, a large number of potential drug candidates are screened using computer algorithms. The aim is to identify compounds that are likely to bind to the target protein and inhibit its activity.

3. Optimization: Once the potential drug candidates have been identified, they are further optimized to improve their potency, selectivity, and other characteristics. This is done by changing the chemical structure of the compound and testing its effects using computer simulations and experimental methods.

CADD has become an essential tool in the pharmaceutical industry, as it allows researchers to efficiently and cost-effectively identify and optimize drug candidates. By using computer simulations, researchers can save time and resources by reducing the number of experiments required to develop new drugs. It is also used to predict the pharmacokinetics and toxicity of new compounds, which can help to reduce the risk of side effects in clinical trials.

In the healthcare industry, CADD has played a crucial role in the development of new treatments for diseases such as cancer, HIV/AIDS, and Alzheimer's. It has also been used to design drugs that are more effective against antibiotic-resistant bacteria. CADD has the potential to revolutionize the drug discovery process and lead to the development of new treatments for a wide range of diseases.