William Taranto moved to US-based pharmaceutical group Merck more than two years ago as the group made a push into non-pharmaceutical healthcare and wanted a leader to be managing director of its new Global Health Innovation Fund.
The fund is off to a running start having already deployed its initial $250m tranche, and being awarded a further $250m tranche for the next two years.
Taranto, who is executive director at the office of innovation in Merck, said: “Most pharmaceutical manufacturers rarely look beyond the pill and invest outside their core business. Merck was very interested in being the best healthcare company in the world and that entailed creating a venture firm that would allow Merck to look beyond the pill and give them optionality around the future. I came to Merck in April of 2010 and recruited a team of venture experts in the adjacency healthcare space that are very good at what they do.”
Taranto, who came to Merck from a similar role at Johnson & Johnson and after a degree from Saint Bonaventure University, said: “I spent 18 years at Johnson & Johnson with the last 10 years in a group called health care strategy and development, which was different from the Johnson & Johnson Development Corporation. The group looked at the future of healthcare, three to five years out, and developed strategies and investments to prepare for that eventual future.”
He added: “It was great to come into a company like Merck and start from scratch, creating not only our strategy but our investment thesis and placing 20 investments in a rapid period of time. We are shaping healthcare in what we are doing with these investments, and being part of Merck is an integral piece of what we do”.
The strategic benefits of Merck’s deal-making under Taranto should become clear in the next few years. Taranto said: “The goal of the fund is to provide optionality around future mergers and acquisitions and hopefully Merck will acquire some of the portfolio. When I started I thought it would be between year three and five when the portfolio would become mature enough for Merck to start looking at it. Next year a good portion of the portfolio will become active and we will begin to make strategic decisions.”
Lessons from the top: Taranto advised: “Before you do any investments you have to have your strategy in place. You need to understand what you are going to do and where you are going to invest. I see a lot of corporate venture funds that start investing without having this mapped out.”