Vanguards of Health Care by Bloomberg Intelligence
Merck’s GHI Fund and the Push to Rewire Pharma's Future
08 Jan 2026
Chapter 1: What is the Merck Global Health Innovation Fund and its mission?
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Welcome to another episode of Bloomberg Intelligence's Vanguards of Healthcare podcast, where we speak with the leaders at the forefront of change in the healthcare industry. My name is Jonathan Palmer, and I'm a healthcare analyst at Bloomberg Intelligence, the in-house research arm of Bloomberg.
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Chapter 2: How does GHI Fund invest at the intersection of biotech and health tech?
And that was a real big change for us was to have been able to create the private equity fund that allows us to deploy more capital and create the scale we need in the industry. And so that was another big subtle change that happened along the growth of the fund. But today we're very focused on pharma problems.
Like I said, pharma services, which is kind of defines where the biggest use cases exist for the industry. and instead trying to price equity in order to solve those problems. And as like any sort of solution, we're one tool in the toolbox for external innovation for Merck. Merck has BD, they have licensing, they have external partnerships that don't require equity.
But we think we're really one of the forefronts of external innovation for Merck. And what's really interesting, the other thing that's evolved and the final thing I'll say is the integration of Merck into working with our portfolio. In the last five years, Merck has really engaged with our portfolio companies.
In fact, over 70% of our portfolio companies has some type of commercial engagement with Merck. We have 70 plus agreements valued at over $225 million in contract value. And what's interesting, one of the most fascinating things that happened this year in our AI and ML and drug discovery, Merck licensed the first AI ML created vaccine from one of our portfolio companies.
They licensed it in to try to create a phase one product going forward. So that was a big first step even in that space. So the good news is, We're providing financial returns for Merck, which we have to do as an evergreen fund, but we're also providing the strategic return, which is extremely important as well.
That's great. There's a lot to unpack there. Maybe just rewinding a little bit, you know, when you made that switch around 2016, was there one investment you made that was a really standout use case that kind of redefined that strategy that was a big win early on? And then I guess I would also be curious, you know, you talked about the PE overlay.
Is there an example there that you can give us of how that's worked as well?
Sure. So on the PE side, one of the big things we did, we originally, when we started in 2010, Merck was actually in cardiovascular care. We ended up leaving, but we're back in cardiovascular today, which shows you how the evolution of pharma works. But at the time, we had invested in a company that was a technology that came out of Mayo. And it was called Preventus Solutions.
And it was a company that created a medical device that looked like a Band-Aid that would sit on your chest and it would prevent AFib from happening or a stroke from happening. And a very predictive product that would allow cardiologists to know in advance whether a patient was going into AFib that could then lead to a stroke.
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Chapter 3: What are the four key areas of investment for GHI Fund?
You know, we're we're We're staffed with people that have experience across not only venture capital, private equity, but they have pharmaceutical operations, sales and marketing experience. They come from the industry as well. And understanding how not only pharma works, especially if you're doing pharma services, I think is a big differentiator.
You have to understand the problems that you're trying to solve. The other thing I think that our team offers too, which I find a lot of independent firms struggle with is understanding how the whole healthcare ecosystem works. We're a very complicated industry and we're the most heavily regulated industry and understanding all the touch points and how they're all connected.
That's important to know. You know, most patients don't understand that even to get your prescription, 10 different entities touch it. It's not just the doctor prescribing you, but the doctor looks at it, it gets adjudicated at typically a third party or You know, and it could be rejected. There's formulary.
You know, there's all these different entities that touch your prescription before you actually end up at the pharmacy. And most people don't understand it. And following how the money flows is really important. So we call it connecting the dots.
And I think one of the things our team does really well is they understand how to connect the dots about all the different pieces of the industry and how it actually works. And I think finally, you know, we're really good investors. because we understand all those things. If you look at the history of the fund, it's been really successful.
You know, we've done 70 plus close to 80 investments, you know, and over the time we've actually only had six complete, you know, losses and we've accessed 40 some odd companies and, you know, we're sitting on another 40 some odd companies. So you can see that We're actually not that one in 10 investor. We actually have a really good history and track record of making good investments.
And as I said earlier, the fact that we now have a lot of commercial agreements, we've shown that we also could be very strategic, not only the Merck, but the industry. So there's a lot of different things that differentiate us as we think about how we are, you know, sort of, you know, different than an independent.
I think the last thing too that I'll say is, you know, we don't struggle with fundraising, right? You know, we have a single LP that is Merck and we're a $600 million evergreen access, believe it or not, to another $150 million should we need it. And one of the things that we never struggle with is trying to have to fundraise all the time.
And that's actually a pretty good comfort where we're not always, you know, our LP isn't demanding. Don't we have to be evergreen and return financial returns? It's not like Merck is a $60 billion company.
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Chapter 4: How does the GHI Fund create ecosystems to solve pharma industry problems?
If you look today, we can monitor anything. The devices are small. There's nothing we can't monitor. The technology is unbelievable. That's where AI is today. We're in the infancy of AI as it relates to the pharma industry and healthcare industry. It's going to do wonderful things. I think in some areas we just have to be very careful as it relates to the patient.
We certainly don't want to find out things about the patient we weren't supposed to find out. So I think we need some regulatory oversight on some of the areas. But it will have a massive impact on the broader industry, as I said, around things like supply chain, clinical execution, regulatory quality. All the things that, at least for pharma, make a pharma run.
And that's, of course, for us as a pharma investor, where we're focused going forward.
That all makes sense. I'd be curious to know, do you have a view in terms of how AI might speed up clinical trials? And this is, I guess, maybe one of the areas of debates that we have with a lot of our clients is, you know, can we speed up trials from, I don't know, seven years to five years, five years to four years?
You know, what's your view on the ability of AI to really improve the timelines for clinical trials?
You know, that's certainly the hope. You know, if you think about the AI and ML and drug discovery, you know, the whole idea is if you can speed up, you know, get it an asset five years sooner than you did, that's the value.
And so if you think about AI and clinical trial, this whole zero gravity clinical trial or, or technology and clinical trial, if you can do things like recruiting, the biggest issue for the pharma companies is recruiting, um, for drug discovery, right? And recruitment and clinical trial is really difficult.
And now that the FDA has mandated that we have to have diversity in clinical trial recruiting, you can't be a, you know, a white male over 50, um, AI is going to help us do that. We actually invested in a company called NPower recently that does clinical trial diversity recruiting. And the whole background is an AI backbone that looks at the community level and tries to help identify patients.
So one of the things we're going to see is it's going to speed up clinical trial recruiting, which will speed up clinical trials. AI is going to also help with site management tremendously, making sure that patients stay within the clinical trial.
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Chapter 5: What role does AI play in transforming pharma operations?
You know, I was part of that, and that's helping patients. And it still exists in the world. And that gives you a good feeling, right? It's not really in the end about the money. It's not really about the street. It's helping patients. And we operate in a place as a venture capital firm that gets to do that. Not all industries get to do something that maybe is impactful like that.
And that's, you know, kind of different, I think. And I think it makes it fun and makes us want to come in every day and try to solve those problems. But really, in the end, that's what it's about, the patient.
I couldn't agree more. Thank you so much for sharing that. And with that, we'll wrap up. That's Bill Toronto, president and general partner of the Merck Global Health Innovation Fund. Thank you so much for joining us for our latest episodes. And please make sure to click the follow button on your favorite podcast app or site so you never miss a discussion with the leaders in healthcare innovation.
I'm Jonathan Palmer, and you've been listening to the Vanguard's of Healthcare podcast by Bloomberg Intelligence. Until next time, take care.
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