Evaluating opportunities in pharmaceuticals requires care and skill. The chief of a firm in this line of business explains what it takes to succeed, and why Dubai figures in his plans.
Matchmaker's eye on money and medicine
Klaus Hammer is the Austrian-born chief executive of a company few non-specialists will yet have heard of, but which promises to be a big player in the multibillion-dollar market for mergers and acquisitions in the pharmaceutical industry. His firm, Andzyme, marries science with finance to produce a sophisticated tool to evaluate pharma products and manufacturers, with a view to finding buyers for both. He has chosen Dubai as his global base.
What exactly does Andzyme do?
Essentially, we have developed a system using artificial intelligence (AI) algorithms to assess and evaluate the many products that exist in the life-sciences sector - pharmaceuticals, life sciences and biotechnology. There are tens of thousands of these globally, but it's difficult for pharmaceuticals companies to know of their existence, let alone their value and potential benefits and value. Our role is to put together buyers and sellers in the sector in a way that maximises value for each.
How can Andzyme have such a comprehensive overview of the global healthcare sector?
We have access to the main database for pharma products via three main routes: we have access to IMS, a specialist market research company. IMS was German in origin but is now US-owned. It's used by the American [food and drug] administration and is regarded as the best database in the world. We also have access to all the main global databases and our own self-generated research.
That sounds like an awful lot of information. How do you process and apply it?
This is where a little bit of luck and coincidence comes in. Several years ago, I met a man I can only describe really as a genius, Dr Gregg Clopath, who is now my partner. We met by chance socially in Switzerland. I was a trained lawyer with an MBA and had worked as a consultant for McKinsey. He was a software developer, but with exceptional talent. He had developed AI systems when he was 12 years old. He had worked on the software behind the IBM computer Deep Blue that beat Garry Kasparov at chess, one of the major events in modern computer history. I knew about pharma, he knew all there was to know about computers, and the idea for a sophisticated stock forecasting tool for the drugs industry came from there.
Who are your customers?
Some 79 of the top 100 life-sciences companies already have a relationship with us. There are thousands of drugs being produced all round the world, all for different applications. Our systems can tell us which of the big drugs companies needs a product in a certain field, and we can suggest to them which of their product portfolio has a gap where a product is nearing the end of its effectiveness or is coming off patent. We can match buyers and sellers, either of products or of whole companies. Our clients are sometimes the big corporations themselves, but increasingly we deal with the investment banks, fund managers, sovereign wealth funds or big investing families looking for opportunities. We can often provide a return of three to 10 times the original investment. Sometimes we also take investment positions if the opportunities are there.
How big is the company?
We have around 1,600 employees worldwide. By far the most of these are in the main facility in Bangalura, India, where we have what you might call an "intellectual sweatshop". That doesn't really do it justice; most of the employees there are highly qualified academics, many with doctorates, but they do the intellectual groundwork on the products, the evaluation and assessment. There is also a network of contacts at most of the big scientific universities around the world. We also have offices in Spain, but the administrative backup is very slim and efficient. We like to keep those kind of overheads down to a minimum.
What is the potential for growth?
We plan to set up a venture capital fund so that others can invest in our potential, and this will probably be the largest healthcare fund in the region. There are big opportunities here.
You plan to establish a headquarters in the Dubai International Financial Centre. Why Dubai?
Well, the Emirates are a fantastic place to do business. We like the business-oriented tax and visa regime, the developed infrastructure, the geographical position between Europe, India and Asia, and lastly the great climate.
We also believe in the growth and financial potential of the region.