Bill Taranto, president and general partner at pharmaceutical firm Merck & Co’s corporate venturing vehicle, Merck Global Health Innovation Fund (GHI), is celebrating an outstanding year of healthcare investment and expects continued success this year.
Taranto draws upon three decades of experience in the healthcare industry, including 20 years of healthcare investment experience.
He co-founded Merck’s GHI Fund around 10 years ago with the aim of providing more choice for the company in merger and acquisition opportunities. The $500m investment vehicle is also supported by $700m of private equity funding to assist with larger-stage deals and roll-ups.
Taranto said the organisation had an outstanding year in 2020, despite the covid-19 pandemic. The fund completed three exits over the year: Merck exited Exostar, an online collaboration platform developer backed by a $10m investment from GHI in 2015, following an initial $5m commitment from the year before.
GHI has exited health research network TriNetX after leading a $40m series D round for the business in March 2019. Merck GHI also exited heart monitoring device marker Preventice in 2020, after participating in a $137m series B round in July 2020.
Merck spun off its disease management technology developer, Ilum, through a merger with telemedicine services provider Infectious Disease Connect, which was backed by University of Pittsburgh Medical Center’s UPMC Enterprises subsidiary. GHI also spun off healthcare data analytics platform Comsort as an independent company.
GHI completed nine investments during 2020 including home blood-sampling kit producer Tasso and pathology diagnostics services provider PreciseDx. The fund also completed five follow-on investments.
Merck recently launched a $50m investment vehicle called Next Horizon, which will invest digital health companies developing ideas that that are at least five to seven years to maturation.
Taranto said the GHI model has helped them manage the issues associated with corporate venture capital investing.
“The biggest issue or pain point for corporate venture is the constant changing leadership within the parent company and change of strategic direction.
“That being said, our model has allowed us to be flexible and adapt easily to these changes but most firms cannot or do not adjust well.”
Taranto said corporations in the healthcare industry could do better by moving away from disparate point solutions towards combined approaches for customers.
“An element of this move could be the identification of synergies between the portfolios of likeminded investors. In essence, broadening the idea of portfolio synergies beyond what is in any one investor’s staple,” he added.
Looking at the year ahead, Taranto said he expects the innovation fund to secure at least five exits and new investments across the oncology, infectious disease, vaccine and supply chain sectors.
In addition to this, Taranto said: “We also believe we will see consolidation of digital health assets, especially in oncology and health IT. “
Merck GHI is looking to ramp up its private equity function to build up its assets in areas of interest, following a surge of activity in the healthcare sector from private equity firms.
“The number of private equity players entering the healthcare space has increased dramatically over the last two years and we see the trend continuing.”
Prior to joining Merck, he worked at pharmaceutical firm Johnson & Johnson, where he spent 18 years in a number of venture capital, marketing, business development and sales roles.
