In 2022, despite changing macroeconomic conditions, the Breyer Capital team continued to identify and invest in some of the world’s most promising opportunities at the intersection of artificial intelligence, healthcare, and life sciences. As healthcare eclipses 20% of GDP, the industry has become a key area of focus for some of the leading companies in the world.
After brainstorming sessions with leaders at Microsoft, Alphabet, Meta, Amazon, and Apple about their healthcare ambitions, I remain extraordinarily optimistic that the application of computation in healthcare and life sciences will be the financial and impact opportunity of this decade. Amazon’s $3.2 billion acquisition of One Medical and CVS Health’s $8 billion acquisition of Signify Health are especially exciting data points in healthcare services that point towards consolidation, investment, and growth in the space.
Since my last healthcare and life sciences update, we have welcomed new companies to the Breyer Capital family and have more than doubled down on several breakout portfolio companies including Iterative Scopes, a leading computational gastroenterology company, and Atropos Health, an AI-powered real-world evidence platform transforming clinical decision-making at the point of care.
We’ve continued to explore how artificial intelligence can transform diagnostic workflows, drug discovery and development, and clinical trials. At the same time, we’ve planted new seeds in leading-edge areas such as quantum technologies and decentralized science at the earliest stages.
Select additions to the Breyer Capital Portfolio:
Atropos Health: We led the $14 million Series A round for Atropos Health, an AI-enabled real-world evidence platform that brings publication-grade observational research to the fingertips of physicians across the country. Using millions of anonymized patient records, the company helps clinicians answer clinical questions that have fallen through the cracks of the evidence-based literature. The company spun out of the School of Medicine at Stanford University and has generated novel evidence across 18 clinical specialties thus far.
SandboxAQ: We were founding investors in SandboxAQ, a Google Moonshot spinout focused on combining quantum computing and artificial intelligence techniques to answer previously intractable questions in life sciences, data security, and clean energy. We are particularly excited about the company’s utilization of quantum approaches to modeling molecular dynamics and simulating the structure and behavior of drugs and targets, for example.
Molecule:Building upon our extensive track record in cryptocurrency and blockchain technologies and the broader Open Science movement, we made our first investment in decentralized science backing Molecule, a decentralized autonomous organization building IP-NFTs that transform research into a liquid asset class, unlocking frictionless self-funding, fueling development, and inspiring collaboration.
Over the next year, we will continue to invest in companies leveraging computation to derive insights from combinatorial assets spanning proteomics, metabolomics, genomics, clinical, and claims data. We believe that the near-ubiquity of electronic health record adoption, regulatory efforts driving data interoperability, and rapidly declining costs of genetic sequencing pose a rare opportunity to advance the field of medicine. As generative artificial intelligence approaches mature (see GPT-3, DALL-E, and AlphaFold), we are monitoring teams, labs, and companies leveraging synthetic data — from regulatory DNA to digital twins.
Given the highly interdisciplinary expertise required to unlock AI’s potential in medicine, we are excited to partner with multi-lingual teams at the earliest stages that bring expertise across clinical medicine, computational biology, artificial intelligence, machine learning, and high-quality patient care.
Since 2016, I’ve been fascinated, excited, and inspired by advances in artificial intelligence, especially when applied to healthcare. I recently wrote a post detailing how I think about AI investing. There, I had an opportunity to share that I’ve never been more confident that artificial intelligence will help companies, institutions, and individuals accomplish extraordinary things for the betterment of humanity. In a world where AI can be a controversial topic, I often get asked why I’m optimistic. The truth is, I’ve always been an optimist. I said as much to my friends at Forbes in 2018 and feel the same way today that I felt then.
“I tend to be much more of an optimist when I think about history. In the 1960s, with all of the advances in biology, so much of it was being applied to better healthcare and to medical breakthroughs, not to biological weapons. I feel the same way today about AI and the benefits of human-assisted [artificial] intelligence in areas such as cancer and healthcare, and in improving healthcare outcomes, patients’ experiences and their ability to understand their medical records, and in doing research around medicine, which is assisted by technology. These are profoundly positive applications of AI, and I tend to be very optimistic.”
At a time when healthcare innovation has never been more important and during a week when some of the best minds are meeting, as they have for the last thirty-nine years, to discuss healthcare investing at the J.P. Morgan Healthcare Conference, I thought this would be an ideal opportunity to share more about how I’m thinking about Healthcare AI investing.
Before speaking about specific current portfolio companies of Breyer Capital, I’ll share some broader thoughts about the vertical.
While AI algorithms are still in their early stages, we can expect to see many more research breakthroughs in the coming months and years. Especially as data sets become larger and more accessible and computational power becomes more affordable, AI applications will become more powerful and ubiquitous.
It seems clear to me that AI applied to human-assisted diagnosis and analysis will create hundreds of billions of dollars of market cap by venture-backed startups. More importantly, if ethically and effectively harnessed, AI breakthroughs will improve patient lives and, perhaps counterintuitively, the patient experience. Many people imagine that AI will make medicine less human. We believe that the opposite is true. We think that a world enriched by better technology will allow doctors to spend more time caring for patients and providing personalized care.
In the short and long term, AI will have dramatic positive effects when it comes to helping companies and institutions with workflow optimization (revenue cycle management), imaging (diagnosis and workflow efficiency), clinical trial recruitment and retention, and drug discovery. Breyer Capital has backed companies pursuing each of these opportunities and we continue to work with our university research partners to identify new approaches and tackle larger problems.
Universities and our current and future university partnerships are among Breyer Capital’s most valuable resources when it comes to Healthcare AI investing. Top universities around the world remain the best places to foster and identify AI talent. Every year I like to spend very significant time on university campuses across the country and world. In 2020, I spent extremely valuable time with deans, professors, post-docs, graduate students, and undergrads, and while I traveled far less, I found Zoom to be an effective way to connect with esteemed academic researchers. While we work closely with many universities, Harvard, Stanford, UT Austin / Dell Medical School, MIT, UCSF, Tsinghua, and Peking University are some of Breyer Capital’s closest partners. I’m also a Founding Member of the Stanford Institute for Human-Centered Artificial Intelligence and think as highly of John Etchemendy and Fei-Fei Li as anyone in the space. In 2021 when it becomes safe to do so, I look forward to visiting more schools and getting a better sense of the budding AI talent located around the world.
Breyer Capital is fortunate to be working closely with superb investors and technology/healthcare leaders such as Michael Dell, Marc Benioff, Sam Palmisano, Nitin Nohria, Gerald Chan, Doug Leone, Marty Chavez, Helena Foulkes, Steve Kraus, and Morgan Cheatham among others. We also spend time with leaders at some of the most forward-thinking tech companies, brainstorming and thinking through long-term opportunities in AI. We marvel at the intellectual horsepower of individuals such as Tim Cook, Satya Nadella, Jeff Bezos, Sheryl Sandberg, Mark Zuckerberg, Doug McMillon, Sunar Pichai, Larry Page, Sergey Brin, and so many others. We’ve also been so encouraged by brainstorming sessions with the Austin entrepreneurship and investing community.
Thanks to wonderful partners, we’ve been able to invest in some groundbreaking healthcare AI companies. I won’t name all of them here and there are many that are remaining stealth for the time being, but I’ll highlight a few below to demonstrate some examples of how healthcare AI will be world-changing.