- Mubadala Capital, an investment arm of Abu Dhabi’s sovereign wealth fund, has a road map when it comes to healthcare investing.
- The three-pronged approach involves tech-savvy pharmas, preventive medicine, and cost-cutting, Mubadala told BI.
- Meanwhile, the firm is readying a fund specific to investments in life sciences and healthcare and looking to expand in the US and Europe.
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Mubadala Ventures, the VC arm of Abu Dhabi’s sovereign wealth fund, has a road map when it comes to navigating the turbulent US healthcare industry.
The venture unit oversees about $2 billion, while the parent, Mubadala Investment Company, manages around $250 billion, said Ibrahim Ajami, head of the ventures group.
The firm is now preparing to launch a venture fund that’ll focus on healthcare investing, with some cash allocated to the US, Ajami said. The fund’s strategy will focus on three main themes: next-generation pharmaceuticals, preventive healthcare, and reducing costs.
During the coronavirus pandemic, VCs have continued to pour cash into healthcare startups. From tech-savvy drugmaking to on-demand urgent care, investors and providers have told BI that a new era of digital health is underway thanks to coronavirus, and that it isn’t going anywhere after the pandemic.
Mubadala declined to say when the healthcare-focused venture fund will launch or how much money it’ll have to invest. Reuters first reported on the plan to launch the venture fund in April.
Theme 1: New ways to make drugs
One area of focus for the fund will be new ways of developing treatments using technology, Ajami said.
“How do you really ultimately address the fundamental challenges that are happening in the pharmaceutical industry with [research and development] by using machine learning? By using high-throughput screening? By using machine vision?,” he said.
Making new drugs is a long and difficult process often characterized by expensive failures. Coronavirus has helped fuel a new breed of startups trying to redefine that process with more tech tools for clinical trials.
But all sorts of companies — like those that study people’s genes for more precise cancer treatments or collect data from health systems that pharmas can study — have been trying to solve this problem for years.
One of the startups in Mubadala’s portfolio, Recursion Pharma, is making interesting investments in drug discovery that fall along these lines, Ajami said. Among other things, Recursion tries to make new medicines based on massive datasets of human cells.
Cell therapy startup Orca Bio, another Mubadala-backed company, is also a good example, he said.
The venture firm also recently invested in Owkin, as Business Insider reported, for its approach to healthcare data storage. It lets pharma researchers learn from health systems’ data while protecting patient privacy, lending them insights that could speed up drugmaking.
Theme 2: Preventive care
Ajami’s second area of focus is preventive healthcare, he said.
Heart disease, stroke, and some of the other top 10 causes of death around the world can sometimes be prevented with exercise or diet changes, by taking medications. One startup, SidekickHealth, aims to solve the problem with mobile apps and recently cut a deal with Pfizer.
Ajami said he’d like to invest in companies that analyze genes, like testing startup Color, and that generally treat diseases proactively instead of reactively.
“How do we migrate from sick care to healthy care?” he said.
Theme 3: Startups that can help reduce costs
Ajami said Mubadala is also interested in how the US might solve its cost problem when it comes to drugs, surgeries, and other ways care is delivered.
“At the end of the day, the healthcare problem in the US is a cost problem,” Ajami said.
He pointed to health-tech startup Innovaccer as one example. Mubadala has invested in Innovacer. Its platform can aggregate information about people from hospitals’ various data silos and help them understand it better, as Business Insider reported.
“How do we improve clinical workflow? How do we address the cost of healthcare delivery through data, through advances in technology, infrastructure, new applications, and new data models?” Ajami said.
“And ultimately, how do you really transform what we refer to as ‘healthcare delivery?'” he said.
The firm’s already made a number of investments according to this approach, which will be the cornerstone of Mubadala’s focus in the healthcare sector going forward, at the same time as it’s looking to expand its reach in the US and European, he said.
“It’s just the innovation intensity that’s happening in the healthcare industry is quite significant,” Ajami said.