Overview
In April 2025, we were proud to host the annual European Health & Life Sciences Symposium at the Shangri-La hotel in Paris. Attended by some 300 delegates from across the industry, participants including investors, innovators, finance providers and advisers enjoyed a wide-ranging agenda covering everything from transaction trends and financing innovation through to navigating policy shifts and identifying investment opportunities.
In an era of intense innovation at the intersection of technology and biology, the healthcare industry is witnessing unprecedented advancements that present exciting openings for investors. “The dynamic world of companies applying innovative technology platforms to reshape drug discovery and patient care is presenting a new wave of investment opportunities,” says Anne-France Moreau, partner at McDermott.
In Depth
Latest Innovation Trends
Two key segments of the health and life sciences ecosystem were identified as optimising growth and development and creating investment opportunities. First, the symposium heard about the TechBio space, where technology platforms and solutions support drug discovery and drug development. Second, the opportunities related to solutions and technologies that support healthcare and pharma services were discussed.
The primary goal of TechBio solutions is speed, with these technologies enabling for the acceleration of drug discovery, clinical trials and commercialisation. At the same time, these businesses aim to derisk the process of identifying potential drugs and assets by improving the chances of success. Ultimately, the focus is on improving the lives of patients that need these therapies, though the use of emerging tech.
The buzz around the application of AI and computer science in biology has attracted new types of investors into TechBio and pharma services, with tech-focused capital coming from venture capital into the biotech space. We have seen a surge in company creation in technology-enabled healthcare, but it covers such a wide range of innovations and business models, it can be complex for investors to navigate.
Assessing Opportunities
Considering the key metrics for assessing opportunities in TechBio, investors spoke about the need to look not only at the assets being developed but also the data that has been generated, though the specifics will vary by business model.
While there is a temptation for TechBio companies to be both services and biotech businesses, that is difficult for investors who tend to come from one side or another.
Those that actively invest in services are less likely to be willing to take on binary regulatory or clinical risk exposures, for example.
In pharma services, investors are looking at indicators that include the client base, recurring revenues, scalability, management team and the pathway to profitability. Often they will focus in on the financial metric that will be used for valuation by an acquirer, which may be earnings but might also be annual recurring revenues. And investors look for partners with realistic valuation expectations.
Investors in these types of companies often look for business moats that are idiosyncratic, whether those are technology, IP, clinical data or regulatory approvals that will give a competitive advantage.
Access to data can be a key policy issue for these businesses, which often rely on some combination of molecular, clinical and biological data. Discussions around sourcing reliable data, complying with relevant regulatory frameworks and protecting intellectual property will be important.
Challenges for Investors
While there is much excitement about the application of AI tools in drug development, the innovators present highlighted the fact that AI can only work with past data and the quality of the data set is critical, so genuine innovation is challenging. Likewise, areas like cell and gene therapy are new and complex areas so the technology and proof of concept is still to be developed, which can be challenging for investors.
There is also a risk that AI and machine learning tools may become commoditised over time, so valuations should not necessarily be based on those technologies but rather on new molecules, clinical data, growth rates and management capabilities. Any use of AI needs to pay close attention to ethics, with clear accountability, responsibility and human decision-making.
Where investors see a multiplication of risk around new technologies in drug development, biotech businesses often find it easier to turn to big pharma for funding because they are more able to get comfortable with that risk. However, some TechBio businesses have platforms that they wish to license to big pharma and seek partnerships, which can create challenges for exit models.
Monika Richter, partner with McDermott, says: “There are many opportunities for investors to leverage innovations in TechBio and pharma services that have the potential to improve drug development processes and patient outcomes. These are exciting and complex emerging areas that are attracting new investors into the healthcare space, but the legal and regulatory frameworks are co-developing in real time, creating a dynamic environment that needs to be navigated with care.”
