Private Equity Firm Warburg Pincus to Participate on Human Genome Program


August 19, 2015


Private equity firms are used to investing in the healthcare sector, but one US-based firm is now getting involved in the field of human genomics. Private equity firm Warburg Pincus is teaming up with other investors to create a new platform in the field of consumer genomics called Helix.


The Announcement


The new business venture was announced on Wednesday. Warburg Pincus is investing the money on the new platform together with the gene-sequencing company Illumina Inc. and the venture capital firm Sutter Hill Ventures. The company announced the financing for the new venture stands at over $100 million.


Jay Flatley, CEO of Illumina and the new chairman of the Board at Helix, said in the official statement, “Helix and its founding investors are committed to creating a neutral platform at the highest quality standard that will work with partners to accelerate consumer adoption of genomics”.


The private equity firm has been investing in healthcare ventures previously, but the announced investment venture is its first in genomics. Noah Knauf, managing director of healthcare at Warburg Pincus, said in the official statement, “We are thrilled to partner with Illumina to transform how consumers interact with their own DNA. We believe the digitization of the genome will unleash entrepreneurs and developers to create new applications for consumers in a way never before possible.”


The Platform


The investors will be channelling further funds to the new company. The Helix platform will operate by allowing consumers to learn about genetic information, as the platform allows genome sequencing and other database services.
The sequencing is done by third party partners, with the users being able to manage the data and “explore an open marketplace of on-demand applications…to gain additional insights in the genomic data”.


The platform is among a growing number of genetic-sequencing companies such as Invitae Corp. and 23andMe Inc. The cost of the technology is coming down and new players are entering the market.


Mary Zimmerman, a spokesperson for the private equity firm, told Bloomberg the platform would be able to provide a competitive price to compete against other consumer products currently available.


The Challenge


Although the market is currently offering exciting opportunities for private equity companies, it isn’t a risk-free venture. Ross Mukan and Vijay Kumar, analysts at Evercore ISI, said in a note, “The real question in our minds remains the pacing of market development as well as the potential challenges of an uncertain regulatory environment”.


The platform is hoping to start operating mid-2016 and has said it looks to work in partnership with the US FDA. As the market is still in its infancy, the regulatory framework could see changes in the coming months and years.


There have been previous investments by private equity firms in genomics companies and the interest could well be on the increase. Helix has hinted of a strong interest by other partners in the project, with the platform announcing established partnership schemes with both Mayo Clinic and Laboratory Corporation of America.


It remains to be seen how well the investment turns out and whether Warburg Pincus makes further investments in the future. In the meantime, you can find private equity deals in the healthcare sector at DealMarket.

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