William Taranto has been one of the champions of ecosystem investing since he moved to US-based pharmaceutical group Merck & Co nine years ago as the group made an effort to venture into non-pharmaceutical healthcare.
The Global Health Innovation Fund (GHI) under his leadership grew quickly to a $500m pool and in 2014 added a $700m private equity fund to help support roll-ups and later-stage deals.
Taranto said the GHI fund had had several key events in 2018: “We had a number of exits. At the end of 2017 and the beginning of 2018, we sold:
- Pharmaceuticals company Cytel to investment management firm New Mountain.
- Healthcare and life sciences-focused data and analytics company Symphony Health to contract research organisation PRA Health Sciences.
- Heart test provider Cleveland HeartLab to medical testing laboratory Quest.
“At the end of 2018, we did an initial public offering of medical device developer Electrocore and sold application and data management software developer Liaison Technologies to enterprise software provider OpenText.”
Taranto added that, from a strategy perspective, the GHI fund narrowed its focus to two key areas: oncology and real-world evidence and data (RWE/D). “GHI created an enterprise-wide effort to lead Merck into the digital future in those spaces.
“The goal is to enhance Merck’s oncology data, network and access, and help us solve our use cases across our business,” Taranto said. He mentioned some of the new investments in those spaces including precision cancer care technology developer Strata Oncology, natural language processing technology developer Clinithink, clinical trial design and recruitment optimisation services provider TriNetX, clinical testing access developer Antidote Technologies and precision medicine technology developer Syapse.
He elaborated the plan for this year: “Our business units from Merck Research Labs and Global Human Health have partnered all of our new oncology and RWE/D companies from a commercial perspective. We look to do multiple new investments in those spaces in 2019.”
Merck GHI completed 11 follow-on investments:
- GenomeDx Biosciences, a genomic information company.
- Livongo, a healthcare assistance platform developer.
- Caresync, a patient management software developer.
- Electrocore, a medical device developer.
- Arcadia Data, a visual analytics software developer.
- eHealth Technologies, an electronic clinical records and images provider.
- ClearData, a healthcare management software producer.
- Ayogo, a patient behaviour change company.
- Preventice, a medical device company.
- WellDoc, a digital diabetes treatment developer.
- Navigating Cancer, a medical software company.
“We reviewed over 350 companies in the oncology and RWE/D space in 2018,” Taranto said. The fund’s investments covered diverse geographical areas including the US, Canada and Europe, financing series A, B and C rounds and had multiple co-investors.
In an interview last year, Taranto told GCV regarding GHI’s evolution over the years: “Not a lot has changed with the fund since we started in 2010. The subtle change to the fund is around our strategy.
“When we first launched, the goal was to provide Merck optionality around M&A as they looked to enter new businesses. Though this remit is still there, we have begun to focus the portfolio and investing in companies that have a more direct and immediate impact on our core business.
“If they can be standalone and provide optionality or revenue, then that is an added bonus. One of the rewards of this change, as Merck has focused on oncology, is that we have done a number of investments in this space which have a real impact on patient’s lives and the health ecosystem.”
