Axios Pro: Health Tech Deals

November 01, 2022

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1 big thing: GTCR targets pharma services tech

Illustration of binary code falling into a prescription pill bottle.

Illustration: Gabriella Turrisi/Axios

GTCR is joining hands with Steve Powell and Mary Mattes to launch Harpula Health, a new platform that will build and acquire tech-enabled pharmaceutical services assets, Sarah writes.

Why it matters: Many anticipated processes for tech-centric pharma services assets (like Medrio) were pushed to 2023 amid this year's unfriendly deal environment, but buyers remain eager to invest in the fragmented industry as tailwinds persist.

  • GTCR's partnership with two industry veterans sets Harpula up to proactively enter that race.
  • Powell built and led Synteract, a former Amulet Capital Partners company, through its $400 million sale to CRO giant Syneos in 2020. Mattes most recently was executive VP of global operations within Syneos' Synteract division.

By the numbers: GTCR managing director Ben Daverman tells Axios the firm is "committing a couple hundred million dollars to the effort" and has the flexibility to start small or quickly scale up.

  • The platform will evaluate corporate carve-outs, founder-led and sponsor-backed companies: "Capital is not the constraint," Daverman says. "The real constraint is having the bandwidth" — which its Leaders Strategy helps to achieve.
  • Powell and Mattes are CEO and COO of Harpula, respectively, and are making a substantial investment alongside GTCR.

Zoom in: GTCR, already an investor in global CRO Curia, is focused on "bringing tech to bear in the clinical trial setting," principal Geoffrey Tresley says, to improve the efficiency and lower costs associated with drug R&D.

State of play: Biotech funding fluctuations notwithstanding, GTCR believes CROs, pharma and biopharma companies will continue to demand outsourced technology capabilities as R&D challenges persist. Tresley notes:

  • Phase 3 clinical trials generate an average of 3.6 million data points, roughly three times the volume of data collected by late-stage studies a decade ago.
  • The cost to launch a drug has more than doubled since 2010.

Between the lines: "This increase in R&D cost and complexity [of drugs], particularly with the shift to specialty pharmaceuticals, is driving higher tech penetration," Tresley says.

  • Clinical trials are still largely run on manual processes, and that lends to a massive investment opportunity — whether that's around the design and preparation of clinical trials, operations, or data and analytics, Tresley says.

👀 What else we're watching: The longtime pharma services investor has another investment in the space it hasn't yet publicly disclosed, Daverman notes.

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