Blackstone on AI’s benefits for life sciences

Horizon Capital, Eurazeo in healthcare deals.

Applications for artificial intelligence are likely endless. This morning, we look at how it is moulding the landscape for healthcare and life sciences, as we hear from Blackstone’s Dr Nicholas Galakatos how machine learning and other technologies will help find new treatments for diseases.

We then look at deals in the segment, such as Eurazeo taking a minority stake in a pre-clinical research and drug discovery company and Horizon Capital investing in a global marketing tech provider servicing the pharma and life sciences industry. We’ll also revisit a deep dive into Permira’s take-private of pharma services company Ergomed.

Intelligent innovation

Kicking off today’s healthcare coverage with a deep dive into the sector. PE Hub Europe’s Craig McGlashan caught up with Dr Nicholas Galakatos, global head of life sciences at Blackstone, to hear his outlook for the segment. Galakatos listed areas of therapeutics and medical technologies in late stage of development as the most attractive investment area, and discussed the change artificial intelligence is driving within the sector.

Here’s a snippet from the interview:

What are the most exciting breakthroughs scientifically?

The sector has seen significant innovation. That said, it may surprise you that there are as many as 30,000 diseases that we know of. And we have cures for less than 500, so we have a long way to go.

I believe the most important current breakthrough in science is our increasing ability to practise precision medicine based on our understanding of the human genome. Common diseases can be caused by different factors and manifest themselves in disease in multiple ways. Our growing ability to understand the genetic basis of disease is helping us better define the genes that cause disease and therefore direct customised medicines that are specific for these targets.

For example, there are over 30 distinct forms of epilepsy and knowing the specific genes that cause each one is helping us find selective medicines for many of them. Advances in technology, particularly artificial intelligence and machine learning, are helping us find the ‘bad actors’ faster than ever before, by rapidly interrogating massive data sets. Because of these advances, I think that we will be seeing more new treatments for the many diseases for which there are no good medicines.

I recommend reading the full interview to find out Galakatos’s thoughts on the ageing demographics, vaccine development and general trends driving the sector forward. You can find the story here.

Drug discovery

Next up, we have the first of our healthcare deals. The Nov Santé Actions Non Cotées Fund, managed by Eurazeo, has acquired a minority stake in Oncodesign Services, a European pre-clinical research and drug discovery company, for €22 million.

Dijon and Les Ulis, France-based Oncodesign Services was created when the Oncodesign group was divided into two independent companies in 2022: Oncodesign Precision Medicine and Oncodesign Services, whose acquisition by ERES IV involved Elyan Partners as adviser in 2022.

The acquisition will boost the group’s revenue to €44 million and its headcount to around 280, including around 50 based in Leiden in the Netherlands.

The investment will enable Oncodesign Services to provide a wide range of pre-clinical research services and accelerate its international expansion, according to a release.

“The outsourcing of pharmaceutical research services is a fundamental trend around the world,” said Arnaud Vincent, managing director of the Nov Santé Actions Non Cotées fund. “To ensure that we are self-reliant in healthcare, it is vital that we keep leading players in this field within France and Europe. The aim is to support scientific know-how in drug discovery, the first link in the healthcare chain.”

On the horizon

Continuing with the healthcare deals. Horizon Capital has invested in Viseven, a global marketing tech provider servicing the pharma and life sciences industry.

Tallinn, Estonia-based Viseven has expanded to more than 30 countries, with development hubs in Ukraine, as well as Argentina, Estonia, India, Poland and North America. It has grown at a consistent rate, more than tripling revenues since 2019.

The transaction is the third investment from Horizon Capital Growth Fund IV, which reached $328 million at its most recent closing held in December 2023.

“I am delighted to announce Horizon Capital’s investment in another global tech champion out of Ukraine, in a sign of enduring resilience for our region,” said Lenna Koszarny, founding partner and CEO at Horizon Capital.

Asset-light pharma

As we’ve talked about the topic of healthcare and AI, I thought I’d highlight a deep dive from earlier this week. Craig McGlashan wrote about Permira’s three-part plan to grow pharma services company Ergomed following an interview with principals Florian Kreuzer and Peter Michel.

Permira completed the take-private of Guildford, UK-based Ergomed in November for £703 million ($893 million; €818 million), entering sectors with a combined total addressable market of over $35 billion, said Michel.

The three-part plan for the business includes investing in the commercial team and refining the go-to-market strategy; accelerating automation and adopt generative AI; and consolidating its fragmented sector.

You can read Craig’s full story here, which includes Permira’s growth plans for Ergomed and reasons behind the acquisition.