Beyond oil and gas: Biotech’s significant place in the Qatar Investment Authority’s strategy

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Since 2020, the Qatar Investment Authority (QIA) has been taking part in important biotech fundings reaching its peak in 2021 and remaining strong in 2023. They recently led a $250 million round in the company BridgeBio specialized in transformative medicine for patients suffering from cancer or genetic diseases. This investment is not an isolated case in the Qatari investment strategy, and they have become a significant player in the ecosystem.

Thanks to its extensive natural oil and gas resources, Qatar has seen exponential economic growth over the past few decades. However, the country has gone beyond the image of a resource-based economy to develop into a knowledge-based, sustainable economy. As it capitalized on soft power investment, such as hosting the 2022 FIFA World Cup, all eyes are now on Qatar. The key to Qatar’s investment strategy is diversification, and QIA is executing it. QIA has grown to become the tenth biggest Sovereign Wealth Fund (SWF) in the world. The health sector and more specifically biotech is no exception to the diversification.

A SWF is state-owned and the capital it invests is directly generated by government activity. With $475 billion of assets under management, according to the Sovereign Wealth fund Institute, QIA and Qatar are significant players in the global investment ecosystem.

Due to an increasing and aging population, and the adoption of a more western lifestyle, countries like Qatar have identified the need for local development and medical treatment products. In attempting to reach the objective of Qatar National Vision 2030, the Qatar Investment Authority will be looking to advance the biotech and life sciences field as a whole.

The Qatar Investment Authority: an influential global player in biotech

The Covid-19 epidemic has shed light on the biotech industry and has allowed governments to realize health was not to be taken for granted. Qatar is no exception. While QIA invested in June 2020 in the German company CureVac which was in the run for the first mRNA Covid vaccine, the Minister of Public Health of Qatar secured a vaccine supply deal with Moderna in October 2020. CureVac ended up dropping its vaccine project due to disappointing results regarding variants, but QIA’s investment certainly installed Qatar as a decisive player in the industry. It’s a testament to QIA’s vision of bringing cutting-edge technologies and solutions to Qatar.

At a time when many investors seem to be investing slightly less in the biotech sector, the Qatar Investment Authority involvement is still substantial. According to Cipherbio, QIA has invested in health-related projects for a total value of $11.8 billion with $5.5 billion in biotechnology overall.

In January 2023, QIA took part in a $85 million series B funding round for the U.S. company Ensoma, which specializes in genomic medicine.  More recently, QIA invested in a $255 million equity round for the radiopharmaceutical biotech company Isotope Technologies Munich. In September, QIA’s investments in the field have been strong, with it taking part in a $90 million financing round for the company Star Therapeutics, and leading a $250 million equity investment round adding BridgeBio to their portfolio.

While the biotech investment ecosystem could be seen to be divided into the European market and the U.S. market, QIA is strategically positioned in both. QIA is one of the most versatile investors in the industry.

“The Qatar Investment Authority invests with vision, we are in for the long run”

Mansoor al Mahmoud, CEO of QIA

The Qatar Investment Authority has played a significant role in advancing the biotechnology industry in recent years. As the sovereign wealth fund of the State of Qatar, the QIA has a diversified portfolio of investments across various sectors, and biotechnology has emerged as a strategic focus area.

“At QIA, we are in the business of creating the world of tomorrow for the future generations,” said Mansoor al Mahmoud, chief executive officer of QIA, in an interview with CNBC International. “We design a portfolio in a way that it is as diversified as possible, in terms of geography but also in terms of sector.”

“For many decades, Sovereign Wealth Funds have been crucial players. They are long time thinkers which make them consistent and reliable.”

Dina Powell McCormick, head of Sovereign Business, Goldman Sachs

“They also tended to be innovative capital providers including in life sciences. It is interesting to see that it is really the Gulf countries together with QIA, which are having a significant impulse” said Dina Powell McCormick.

The Qatar National Vision 2030 sets the objective that “Qatar becomes an advanced society capable of sustaining its development and providing a high standard of living for its people. Qatar’s National Vision defines the long-term goals for the country and provides a framework in which national strategies and implementation plans can be developed.”

To do so, the Qatar government has identified five main challenges among which are “the needs of the current generation and of future generations, managed growth and uncontrolled expansion and economic growth, social development, and environmental management.”

Investing in biotech to improve Qatar’s next generation’s society

What does it mean to be a long-term thinker when it comes to investment? It would mean that anticipated exit strategies are not an option in QIA’s plan. Also, diversification is not only a way for QIA to be positioned in every sector but also to be more efficient in each of them.

Industries are more and more intertwined. Biotechnology is, of course, a stand-alone field, but it is now overlapping with digital medicine as well as other sectors. QIA’s diversified portfolio could create interesting synergies. Reaching healthcare objectives raises numerous societal challenges, and the best way to tackle them might be to anticipate them.

QIA could constitute a bridge between the U.S. and the European markets. The synergy that QIA is building with its highly diversified and a growing portfolio is crossing sectors and markets.

The biotech investments of the Qatar Investment Authority are geographically and technically diverse, and they also come at different stages of development of the company or organization. There is an interesting balance between the funds QIA has injected into companies in initial public offerings (IPOs) ($728.7 million), seed and series A to C ($3.2 billion) as well as series D to F funding rounds ($5.8 billion).

In addition to financial support, the QIA has played a role in establishing partnerships and collaborations within the biotech industry. This includes agreements with academic institutions, research centers, and biotech companies, both in Qatar and around the world. These collaborations promote the exchange of knowledge and the development of a thriving biotechnology ecosystem in the region. Investment is not only about providing the capital fund that the company needs to reach milestones, but also about opening a network of advice and partnership opportunities.

Furthermore, the QIA’s investments have helped diversify Qatar’s economy, reducing its reliance on oil and gas revenues. Biotechnology is a sector with immense growth potential, and by investing in it, the QIA hopes to contribute to the country’s long-term economic stability and development.

What does the current Qatar biotech investment landscape look like?

Qatar has the ambition to build an economy relying on knowledge, skill, and expertise. But it is not only about sustaining its economy but also providing its people with the best living conditions, which the healthcare system contributes to. The international investments are just one dimension of the Qatar strategy to reach this objective.

Qatar’s strategic location as a bridge between the East and the West, along with the QIA’s financial firepower, positions the nation as a key player in the global biotechnology landscape. The QIA’s commitment to the biotech industry not only promotes economic growth but also supports advancements in healthcare, agriculture, and environmental sustainability, benefiting not only Qatar, but the world at large.

Traditionally, biotech’s key players would be established in Western countries, but there has been, if not a shift, at least growth in the biotech industry in the Middle East. Examples of this would be the Qatar Science and Technology Park, Sidra Medicine, or the Qatar Biomedical Research Institute. Each of these organizations already collaborates with decisive actors of the industry. Saudi Arabia and the United Arab Emirates are also looking to become prominent in the field.

Qatar and the Middle East are becoming more and more attractive to actors of the industry. More than 450 pharmaceutical manufacturers are already implanted in the region. The Qatar government is offering significant incentives to overseas firms represented by free zones providing 100% ownership as well as tax advantages. This drives companies to implement their research and development towards the Middle East.

Also of note, is the 10% to 15% projected growth of the pharmaceutical market in the Middle East versus 5% in the Western market.

The Middle East as a new biotech Hub

Initiatives such as Dubai Biotechnology and Research Park (Dubiotech) drive interest in the region. Qatar is not the only one to play the game of influence in the region. Saudi Arabia is also a compelling example of why the Middle-Eastern biotech market is growing.

Other important healthcare hubs such as the King Fahad Medical City in Saudi Arabia are also a strategic incentive considering The Gulf Cooperation Council includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – a leading pharma purchasing group in the region. The region has built a consistent ecosystem and is looking to grow in years to come.

The Qatar Foundation’s Education City allows the development of talents and research directly in Qatar’s ecosystem. Prestigious university branches are already housed by the structure, Cornell-medicine or HEC Paris.

As Qatar leverages biotechnology to address global challenges, it’s also making a statement: that wealth is not just about what’s beneath the ground, and there is a future built on technology and healthcare. With QIA at the helm, Qatar might on the path towards becoming a biotech powerhouse in the region, and in the world.

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