《2024全球醫(yī)療健康行業(yè)私募股權(quán)報告》

GlobalHealthcarePrivateEquityReport2024Thisworkisbasedonsecondarymarketresearch,analysisoffinancialinformationavailableorprovidedtoBain&Companyandarangeofinterviewswithindustryparticipants.Bain&CompanyhasnotindependentlyverifiedanysuchinformationprovidedoravailabletoBainandmakesnorepresentationorwarranty,expressorimplied,thatsuchinformationisaccurateorcomplete.Projectedmarketandfinancialinformation,analysesandconclusionscontainedhereinarebasedontheinformationdescribedaboveandonBain&Company’sjudgment,andshouldnotbeconstruedasdefinitiveforecastsorguaranteesoffutureperformanceorresults.Theinformationandanalysishereindoesnotconstituteadviceofanykind,isnotintendedtobeusedforinvestmentpurposes,andneitherBain&Companynoranyofitssubsidiariesortheirrespectiveo?icers,directors,shareholders,employeesoragentsacceptanyresponsibilityorliabilitywithrespecttotheuseoforrelianceonanyinformationoranalysiscontainedinthisdocument.ThisworkiscopyrightBain&Companyandmaynotbepublished,transmitted,broadcast,copied,reproducedorreprintedinwholeorinpartwithouttheexplicitwrittenpermissionofBain&Company.Copyright?2024Bain&Company,Inc.Allrightsreserved.GlobalHealthcarePrivateEquityReport2024ContentsHealthcarePrivateEquityMarket2023:Year

inReviewandOutlookGenerativeAIWillTransform

Healthcare21217HealthcareITHitsaSpeedBumpLife

Sciences:NavigatingShiftsintheInnovation,Regulatory,

andOperationalTerrains2431India’s

HealthcareIndustryComesofAge1HealthcarePrivateEquityMarket2023:Year

inReview

andOutlookMacroeconomicchallengeshave

exactedatollonhealthcarebuyouts,butgreenshootsindealactivityreflecttheindustry’s

strongfundamentalsBy

Nirad

Jain,

Kara

Murphy,

Dmitry

Podpolny,

Franz-Robert

Klingan,

Vikram

Kapur,and

Alex

BoultonAt

a

GlanceInvestorscontinuetryingtounlockliquidityandraisecapitalfor

healthcaredeals,inachallengingfund-raisingenvironmentBiopharmadealsrepresentthebiggestshareofhealthcarebuyouts,whilenewmodalitiesandinnovativetherapiessuchasGLP-1stransformtheinvestmentlandscapeAsinvestorslooktodiversifytheirAsia-Pacificbuyoutactivity,IndiaisviewedasaplacetodeployhealthcarecapitalatscalePrivateequityinvestorscontinuetopursuehealthcareITdeals,withrisingcompetitionfromtechspecialistsandcorporateinvestorsThehealthcaresectorcontinuedtobe

ahubofprivateequity(PE)dealactivityin2023,relativetoallPEdealsacrosstheworld,despitehigherglobalinterestrates,in?ationarypressures,andbroadergeopoliticaluncertainty(see

Figure

1).2GlobalHealthcarePrivateEquityReport2024Figure

1:

HealthcarehelditsowninatepidoveralldealmarketGlobal

buyout

deal

value,

$

billions(excluding

add-on

deals)OtherbuyoutsHealthcarebuyoutsDec2023forecast1,012654501484480430444372339295300230219$22220109%1181291310148159161117131815191520212120221523E15HealthcareaspercentageoftotaldealcountNotes:Excludesspin-offs,add-ons,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023Sources:Dealogic;

AVCJ;

BainanalysisAcrossallregions,anumberofcommonthemesemerged.To

start,biopharmadealsalongwithtransactionsinvolvingrelatedservices,suchascontractresearchorganizations(CROs)andcontractdevelopmentandmanufacturingorganizations(CDMOs),madeupthelargestshareofglobaldealvalueat48%(see

Figure

2).Meanwhile,inthehealthcareinformationtechnology(HCIT)space,dealsforelectronicmedicalandhealthrecordprovidersunderscoredtheimportanceofnext-generationITinhealthcare.We

alsotrackedthecontinuedriseofglucagon-likepeptide-1agonists(GLP-1s),whichwillhave

implicationsacrossthesector,includingsupportingcontinuedgrowthinthesterile?ll?nishmarket,wheretheleader,BaxterBioPharmaSolutions(nowSimtra),wasacquiredbyWarburgPincusandAdventInternational.3GlobalHealthcarePrivateEquityReport2024Figure

2:

BiopharmacomposedthelargestshareofhealthcaredealsPercentage

of

global

healthcare

buyout

deal

value(excluding

add-on

deals)100%8060402002001

02

03

04

05

06

07

08

09

10

11

12

13Providerandrelatedservices

BiopharmaandrelatedservicesPayerandrelatedservices

Lifesciencestoolsandrelatedservices14

15

16

17

18

19

20

21

22

23EMedtechandrelatedservicesNotes:Excludesspin-offs,add-ons,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023;2010valueincludes$1billionofuncategorizeddealsSources:Dealogic;

AVCJ;

BainanalysisTheyearsawsixdealsinexcessof$2billion—thelargestbeingthetakingprivateofSyneosHealthbyElliottInvestmentManagement,PatientSquareCapital,andVeritasCapital—comparedwith13in2022and14

in2021,thoughwithsomelargedealsin?ux.Therehavealsobeen

around375dealsbelowthe$2billionmark,a

testamenttohighlevelsofactivityatthemiddleandsmalllevels.WithinNorthAmerica,announceddealvaluescameinaround$29billion,withbiopharmaaccountingfor25%ofdealactivityand54%

ofdealvalue(see

Figure

3).Activityinproviderbusinesses(historicallya

largeshareofUSdeals)slowedasthose

businessesexperiencedin?ationaryandlabormarketpressures.Nonetheless,a

numberofproviderdealsclosed

acrossspecialtiessuchasoncology,orthopedics,andcardiologywiththeopportunityto

driveancillaryexpansionsrelativelyinsulatedfrombroaderhealthcareandmacroeconomicpressures.Case

inpoint:TPG

andCencora’s(formerlyknownasAmerisourceBergen)acquisitionofOneOncologyfromGeneralAtlanticfor$2.1billion.InEurope,announceddealvaluefellapproximately44%

yearoveryearfrom$25

billionin2022to$14billionin2023.ExcludingEQT/Luxinva’sacquisitionofDechraPharmaceuticals,theannounceddealvaluewouldhavedeclinedbyabout70%.Constrainedcreditmarketsandcontinueddisruptionfromlaborandcost

in?ationdampenedactivityintheretailhealthandprovidersectors.Europealsosawseveralannouncedprocesses

thatdidnotresultina

transaction,asbuyersandsellersfailedtoalignonvaluations.4GlobalHealthcarePrivateEquityReport2024Figure

3:

NorthAmericastillhoststhehighestvalueofhealthcaredealsHealthcare

buyout

deal

value,

2018–22,

$

billions(excluding

add-on

deals)Healthcare

buyout

deal

value,

2023E,

$

billions(excluding

add-on

deals)$29$26314141037921North

AmericaEuropeAsia-PacificRestofworldNorth

AmericaEuropeAsia-PacificRestofworldProviderandrelatedservicesBiopharmaandrelatedservicesMedtechandrelatedservicesPayerandrelatedservicesLifesciencestoolsandrelatedservicesNotes:Excludesspin-offs,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023Sources:Dealogic;

AVCJ;

BainanalysisDiversification

of

investments

in

the

Asia-Pacific

regionIntheAsia-Paci?cregion,dealactivitywasslightlylowerthan2018–22levels,withannounceddealvalueataround$14

billion(see

Figure

4).Chinaremainsveryrelevantforinvestment,whileIndiarepresentedthelargestshareofannounceddealvalue.Thatsaid,investorsseekingtomanagegeopoliticalriskbegantobroadentheirhorizonstootherAsia-Paci?ccountries.India,inparticular,hasseenalong-termriseinbiopharma-relatedactivity(forexample,ingenericsandactivepharmaceuticalingredientmanufacturing),albeitwithaslowdownyearoveryear,

whilealsoseeinggrowthindomesticdemanddrivenbyanexpandingmiddleclassandgovernmentinsuranceprograms(see

Figure

5).Thesemacroeconomicdynamics,coupledwithanumberofsuccessfulexitsfromearlyinvestorsinIndia—suchasTPG’ssaleofacontrollingstakeinCareHospitalstoBlackstone—havepropelledprivateequitysponsorstoregardIndiaasaplacetodeployhealthcarecapitalatscale.5GlobalHealthcarePrivateEquityReport2024Figure

4:

DealactivityhasprovedtobemoreresilientinAsia-PacificrelativetootherregionsGlobal

healthcare

buyout

disclosed

deal

value,

$

billions(excluding

add-on

deals)1518779662063604317363011301423152112$1516201013161819212223ENorth

AmericaEuropeAsia-PacificRestofworldDec2023forecastNotes:Excludesspin-offs,add-ons,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023Sources:Dealogic;

AVCJ;

BainanalysisFigure

5:

IndiahastakenanincreasinglyimportantroleinAsia-Pacific’s

healthcaremarketHealthcare

buyout

deal

value,

$

billions(excluding

add-on

deals)Healthcare

buyout

deal

count(excluding

add-on

deals)$5371611171817142352618868

156

179

92

128100%80100%80606040402020002015

16171819202122

23EIndia

China2015

16171819202122

23ERestof

AsiaNotes:Excludesspin-offs,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023Sources:Dealogic;

AVCJ;

Bainanalysis6GlobalHealthcarePrivateEquityReport2024Responses

to

liquidity

challenges:

value

creation

and

secondarytransactionsSponsorsfacedachallengingfund-raisingenvironmentin2023,atatimewhenoverallexitvolumewasdecreasingandcompetitionforfreshcapitalwasincreasing.InlinewiththeoverallPEmarkets,sponsorexitsinhealthcaredeclinedin2023,settingupPEfundsforacon?ictin2024betweenprolongingholdingperiodsandthedesireamonglimitedpartnersforliquidity.Fundsponsorshave

beenstrategizingabouthowtoo?settheimpactontheinternalrateofreturnfromlongerholdingperiodsviatwomechanisms:?rst,byinvestinginincrementalvalue-creationopportunities,withanemphasisoncommercialexcellence,pricing,andmarginexpansion,andsecond,byexploringalternativeavenuesforliquidity,bothforthefundsandtheirlimitedpartners.Thelatterapproachhastriggeredariseintheexplorationofsecondarytransactions(partial/earlyexits)includingcontinuationvehicles.In2023,manybuyoutfundsinitiatedsecondary-dedicatedfunds;notably,

Blackstoneraised$24.9

billion,$2.7

billionofwhichisearmarkedtoitsinauguralGP-ledcontinuationfundstrategy.Inaddition,Ardian,LexingtonPartners,andGoldmanSachscollectivelyfund-raisedmorethan$50billionfortheirsecondaryvehicles.Severalfactorsmaketheseinstrumentsattractive:secondariesprovideGPsanearly,

oftenpartialexitopportunity,allowingthemtosecureliquidityto?nancegrowthambitionsorreturncapitaltoinvestors,andboostingafund’sdistributionstopaid-incapital.Continuationfunds,anotherformofsecondarytransaction,buytimeuntilthemarketappropriatelypricesaholding’spotential.Moreover,bid-askspreadsforsecondarymarketcontinuationfunds,wherethesellerisoftenapartialbuyer,

tendtobe

narrowerthanthebid-askspreadsinprimarymarkets.PE?rmshave

alsosoughttonavigatethecurrentenvironmentbyjoiningwithother?rmstotacklelargertargets,inadditiontoseekingpartnershipswithandcapitalfromsovereignwealthfunds(asintheacquisitionofDechraPharmaceuticals).PE?rmsarenotimmunetobroaderfund-raisingchallenges:Preqinestimatesthatin2023therehasbeen$3.3trillionofglobalprivatecapitaltargetedbyfunds,butonly$1trillionraised.Largefundsarecapturingagreatershareofallocations,bene?tingfromstrongfundstrategies,commercialmotions,di?erentiatedpitches,andsector-specializedinvestmentteams.7GlobalHealthcarePrivateEquityReport2024Corporate

M&A:

Strategics’

access

to

lower-cost

capital

enabled

sustainedbiopharma

deal

activityHealthcarecorporateM&Avaluewasupfrom2022,buckingheadwindsonbiopharmafromtheIn?ationReductionAct(IRA)intheUS.P?zerannounceditsacquisitionofSeagenforjustunder$45billioninthelargestacquisitioninbiopharmasinceAbbvie’sacquisitionofAllerganfor$63billionin2019.

Strategics,especiallylarge-capbiopharmas,have

retainedaccesstolower-costcapital,whichhasfueledhigherlevelsofactivitycomparedwithbuyoutfunds.Thislevelofactivityoccurreddespiteintensi?edscrutinyfromtheFederalTradeCommission(FTC),asseeninsuitsoverAmgen’sacquisitionofHorizon,adealannouncedin2022andclosedrecently.InreactiontoheightenedFTC

scrutiny,strategicsappeartobe

prioritizingmoremodestacquisitionsthatadvancespeci?cstrategicgoalsandarelesslikelytoarouseantitrustscrutiny—forexample,Merck’sacquisitionofPrometheusBiosciences(see

Figure

6).Thatsaid,corporatehealthcareM&Ahasseen19

dealsinexcessof$2billioninthe?rstthreequartersof2023.Figure

6:

Thevalueofdealsby

strategicbuyersedgedupin2023,asstrategics’accesstofinancingallowedthemtododealslargeenoughtomove

theneedleGlobal

healthcare

and

life

sciences

strategic

deal

value,

$

billions543446417418393315305275132722227423E25316$2032010198111481214151718192021Total

activityQ42023forecastNotes:Q42023dealvalueisastraight-lineextrapolationusingQ1–Q3data;strategicM&A

includescorporateM&A

deals(whichincludePEexits)andadd-ons,excludesspecialpurposeacquisitioncompanies/blankcheckcompaniesdefinedbydealtechnique(SPAC

acquisition),excludesventurecapital/corporateventurecapitaldefinedbydealtechnique(fundinground)oracquirerbusinessdescription(venturecapital),excludesotherstrategicPEbuyers’

dealsclassifiedasstrategicbuthavingtheacquirer’sspecificindustrygroupasdefinedbyDealogic:finance-acquisitions/restructurings,finance-capitalpoolcompanies,orfinance-governmentsponsoredentities/creditagenciesSource:Dealogic8GlobalHealthcarePrivateEquityReport2024Macroeconomic

headwinds

bu?et

healthcareHealthcarePEhasoutperformedothersectorsacrossmultiplemarketcyclesandrecessionaryperiods;however,thereasonsforthisresiliencehave

variedfromcycletocycle.Overthepastdecade,dealreturnsweredrivenbyrevenuegrowthandmultipleexpansion—thelatterabyproductoflowinterestratesandabundantcredit.Bycontrast,thecurrentin?ationaryclimatehastakenaheavytollonlabor-intensivebusinesses,aslaborshortageschallengemanyhealthcaresectors.Still,we

seepositivemomentumgeneratedfrominnovationtriggeredbythepandemic,whichhasledtoarangeofnewhealthcaredeliverymodelsandmodalities(suchasremotephysiologicandtherapeuticmonitoringandat-homecare),andnewlife-sciencescapabilities(suchasCDMOs’supplyexpansionandCovidvaccinedistribution).Segmentspropelledbythisinnovationhavecontinuedtopowerdeals,whilesegmentswithamorechallengingcoststructurelookforwaystoimprovemarginpro?le.No

twocyclesarethesame,buttherearereasonsforoptimismaboutthefutureofhealthcareinvesting.We

seepositivemomentumgeneratedfrom

innovationtriggeredby

thepandemic,whichhasledtoarangeofnewhealthcaredeliverymodelsandmodalities(suchasremotephysiologicandtherapeuticmonitoringandat-homecare),andnewlife-sciencescapabilities(suchasCDMOs’supplyexpansionandCovidvaccinedistribution).9GlobalHealthcarePrivateEquityReport2024What

to

look

for

in

2024

and

beyondFollowingaslowstartto2023,growthsignalshave

reemergedinthebuyoutmarket(see

Figure

7).Inmanygeographies,in?ationiscoolingastheimpactofhigherinterestratestakee?ect;atthesametime,elevatedmaterialandlaborcostsareshowingupashigherreimbursementsforhealthcaregoodsandservices.Increditmarkets,ratesareprojectedtoremainelevatedthrough2024.As

investorsadjusttotheserealities,we

expectsponsor-to-sponsorandsecondarytransactionstoincreasein2024.Meanwhile,take-privates,carve-outs,andsecondarieswillcontinuetorepresentanelevatedshareofdealactivityasinvestorsseektounlockvalue.Followingaslowstartto2023,growthsignalshave

reemergedinthebuyoutmarket.Figure

7:

Healthcaredealvalueclusteredinthemiddleof2023Global

healthcare

buyout

deal

value

2023,

$

billions(excluding

add-ons)Global

healthcare

buyout

deal

count

2023(excluding

add-ons)4013123020665103$332110January

FebruaryMarchAprilMayJuneJulyAugust

September

October

NovemberProviderandrelatedservicesPayerandrelatedservicesBiopharmaandrelatedservices

MedtechandrelatedservicesLifesciencestoolsandrelatedservicesDealcountNotes:Excludesspin-offs,add-ons,loan-to-owntransactions,specialpurposeacquisitions,andacquisitionsofbankruptassets;basedonannouncementdate;includesannounceddealsthatarecompletedorpending,withdatasubjecttochange;dealvaluedoesnotaccountfordealswithundisclosedvalues;valuesupdatedbasedonDealogic2020sponsorclassifications;valuesincludenetdebtwhererelevant;2023EannualizedassumingtheaverageratioofJanuary–NovembertoDecemberfrom2019to2022,basedondatathroughNovember30,2023Sources:Dealogic;

AVCJ;

Bainanalysis10GlobalHealthcarePrivateEquityReport2024Givenanimprovingmacroeconomicbackdrop,investorsshouldconsiderthesequestionsfor2024andbeyond:?When

will

generative

AI

transform

the

healthcare

sector?

CurrentpilotsofgenerativeAItoolshave

focusedonrepetitiveorexpensivetaskssuchasdocumentation.Whenthesetoolsmovetowidespreadrolloutsthattouchonthecorecompetenciesoforganizations,thee?ectswillbe

signi?cantandwidelyfelt.?How

will

the

HCIT

landscape

shake

out?

HCITremainsanimportantleverforhealthcareandlifesciencesorganizationsseekingtoo?setmacroheadwindsandmakebetteruseofdataandanalytics.Inthisenvironment,bothprovidersandbiopharmacompaniesarestrikingabalancebetweenadoptingplatformsvs.best-of-breedsolutions.WithinHCIT,

Epiccontinueditsexpansioninseveralo?erings,suchasitspayer

platform.Thecompetitionforassetsisintensifying,withtraditionallynonhealthcareinvestorsenteringthespace,underscoringtheneedforstrongplaybooksinHCIT.??How

will

life

sciences

innovation

continue

to

a?ect

investing?

Duringthepastfewyears,we

saw

stronggrowthinnewmodalitiessuchasmRNAandtherapeuticclassessuchasGLP-1s.Whilethedirectimplicationsofgrowthareclear,therearesigni?cantdownstreame?ectsofincreasedGLP-1agonistuptakewithinpharma,healthcare,andbeyond.How

will

India’s

role

in

Asia-Paci?c

play

out?

InvestmentsinandstrategiesfocusedonAsia-Paci?careevolving,andIndia’s

favorablemacrotailwindshave

madeitaleadingdestinationforcapital.Indiahastraditionallyseeninvestmentsinbiopharmaandproviders,anditisstilltoosoontoknowwhethergreenshootsinotherareassuchashealthinsurancetechnology?rmsachievecomparableprominence,andwhetherthese?rmscanparlaytheirsuccessinIndiatoexpandacrossAsia-Paci?c.?How

can

?nancial

sponsors

e?ectively

respond

to

liquidity

pressures

from

theirinvestors?

Sponsor-ledsecondarytransactions,especiallycontinuationfunds,have

increaseddramaticallyinthepastdecade.However,therecordamountofcapitalraisedforsecondariesislikelytoincreasecompetitioninthisspaceaswell.Giventhemountainofcapitalwaitingonthesidelines,competitionforin-marketdealsisexpectedtoremainstrong.Internalratesofreturnhistoricallyhave

beendrivenbyrevenueandmultipleexpansion,whichwillbemorechallengingtoachieve.PEsponsorswillneedtoestablishhighercon?denceinvaluecreationopportunitiesearlier,suchthattheycancommitgreatercapital.Itiscriticalforsponsorstothinkbeyondpurecommercialdiligenceandevaluateawidersetofoperational,technological,andotherfactorssuchasenvironmental,social,andgovernanceconsiderationsearlyintheirprocesstocreatevaluequickly.

Onlyaclearfundstrategypairedwithstronginvestmentscreening,integrateddiligence,focusedteams,andpost-acquisitionvaluecreationplanswillsetthemostsuccessfulinvestorsapartintheyearahead.11GenerativeAIWillTransformHealthcareAonce-in-a-generationtechnologysurgesintoacenturies-oldindustryBy

Eric

Berger,

Nirad

Jain,

Kara

Murphy,

Dmitry

Podpolny,

Franz-Robert

Klingan,Vikram

Kapur,

and

Alex

BoultonAt

a

GlanceGenerativeAIpromisestodrivesignificantproductivitygains,improvepatientandproviderexperience,andultimatelyleadtobetterclinicaloutcomesThetechnologycouldloweradministrativecosts,speedbiomedicalresearchanddrugdevelopment,improveclaimsmanagement,andhelpdevelopnext-generationdiagnosticequipmentBigtechnologycompaniesarepartneringwithhealthcareorganizationstoapplygenerativeAI,andinvestorsaredeployingcapitalinnascentcompaniesbuiltaroundthetoolInvestorsneedtoconsidergenerativeAI’s

disruptivepotentialonportfoliocompaniesandnewinvestments,andidentifyopportunitiestotakeadvantageofthetechnologyFoundationmodels,largelanguagemodels(LLMs),andgenerativearti?cialintelligence(AI)capturedtheattentionofproviders,biopharmas,payers,andinvestorsoverthepastyear,

drivenbythepromiseofmakinghealthcaredeliverymoree?cient,innovative,ande?ective(see

Figure

1).Whiletraditional,analyticalAIhasbeenusedinhealthcareformanyyears,generativeAIisdistinguishedbyitsabilitytocreatenewcontent,summarizeandtranslateexistingcontent,and,ultimately,to“reasonandplan.”12GlobalHealthcarePrivateEquityReport2024Thetechnologyhaspotentialacrossmanyusecases,includingthese:?Forprovidersandincaredelivery,

itpromisestocutthetimespentondocumentingpatientvisitsandreimbursement-relatedcommunications,whichwouldreduceclinicianburnoutandloweradministrativecosts.Indeed,organizationssuchasHCAHealthcarearepursuingtheseopportunitiesviapartnershipswithtechcompaniessuchasGoogle,inpartbecausepatientsmay

alreadybe

changingtheirbehavior,usingo?-the-shelftoolstounderstandandinformtheirinteractionswithclinicians.?Inbiomedicalresearchanddrugdevelopment,generativeAIisspeedinginnovation,asevidencedbythestrategicalliancebetweenSano?andBioMap,whereSano?willuseBioMap’sAIplatformtooptimizetheprocessofdrugdiscovery.Molecularbiology-speci?cLLMsarealsosupportingpredictivemodelingofproteinstructureandtarget-bindinga?nity,

inadditiontothecreationoftherapeuticcandidatesthemselves.??Insurersandotherpayershave

longmadeuseofAIindataanalytics,claimsmanagementautomationandadjudication,andqualityandriskmanagement.Now,

theyareimplementinggenerativeAIformembernavigation,anexamplebeingUnitedHealthGroup’s

virtualassistantforpatientcommunication.Medtechcompanies,meanwhile,arefocusingtheirinvestmentsonnext-generationdiagnosticequipmenttodetectdiseasesviaAI-enabledhardware,surgicalrobotswithAI-poweredsystems,orsmartremote-monitoringdevices.Forexample,PhilipsispartneringwithAmazonWeb

ServicestodevelopgenerativeAItoadvancethecompany’sPACS

imageprocessingandenhanceradiologywork?ows,aspartofitsbroaderAIe?ortsindiagnosisandtreatment,connectedcare,andpersonalhealth.?As

foundationmodels,computervision,andotherareascontinuetomature,alltypesofhealthcareorganizationswill?ndopportunitiestoapplygenerativeAItosupportoperationsacrossthevaluechain(suchassupplychainmanagementandback-o?ceactivities).Ultim