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AstraZeneca signs $555mn AI deal to develop gene-editing therapies

Pharmaceutical company is latest to invest in artificial intelligence to speed drug development

AstraZeneca has signed a $555mn deal with a San Francisco-based biotech business that specialises in artificial intelligence — the latest pharmaceutical company to seek an AI partner for drug development. 

The agreement with Algen Biotechnologies gives AstraZeneca exclusive rights to develop and commercialise therapies from the gene-editing technology known as Crispr. Algen was spun out of the Berkeley lab where Jennifer Doudna developed the technology, for which she won the Nobel Prize for chemistry in 2020. Doudna is an adviser to Algen.

Algen will receive up to $555mn for hitting regulatory and commercial milestones in collaboration with AstraZeneca, which is not taking an equity stake. It has previously raised $11mn and received a $350,000 grant from the National Institutes of Health in 2021 for cancer research.

While AI has the potential to speed up successful drug testing, there are few AI-discovered drugs in late-stage clinical trials, and not one has been approved. Meanwhile, the amount of cash flooding into all AI investments is seen by many as a bubble. 

With AI, “I think we are definitely in a period of hype at the moment,” Jim Weatherall, AstraZeneca’s chief data scientist, said. “Today, I think our way of controlling the hype is to carefully introduce AI as a tool” for the company’s scientists, he added.

“To be sure, [AI] is no magic bullet for drug development. While sometimes it is overhyped, you don’t want to downplay it either because the potential of this technology is huge.”

New AI tools are increasingly sought by big pharma companies to save on costs and time. In 2023, Roche partnered with Nvidia to work on drug development. AstraZeneca in 2019 started a collaboration with BenevolentAI for lung and kidney diseases. But UK-based Benevolent’s shares plunged more than 99 per cent before it delisted in March. 

AstraZeneca says it still has a partnership with Benevolent.

Algen, which has previously applied machine learning to oncology treatments, will be working for AstraZeneca on immune system diseases.

“We are not just analysing data using AI,” said Chun-Hao Huang, Algen’s co-founder. Rather, AI and Crispr are being paired together to generate solutions, he said.

New drugs fail up to 90 per cent of the time when they reach clinical trials. For AI to be successful, pharmaceutical companies need to do a better job at benchmarking how the technology is performing versus conventional methods, said Alex Zhavoronkov, chief executive of AI for drug discovery company Insilico.

For now, “the role of the pharma industry in AI is very limited when it comes to early stage drug discovery,” he said.

Bain Capital says buyout firms must be more cautious as growth slows

US private equity group bucks industry trend of missed fundraising targets with conservative strategy

Bain Capital has warned buyout firms need to adapt to an era of lower growth as the conditions that fuelled the industry’s rise, such as cheap credit and rising valuations, are fading.

While many private capital groups aim to raise as much money as possible, some of the older privately held buyout firms such as Bain Capital are instead limiting growth.

“There have been a lot of positive tailwinds over the course of the last decade or more in private equity investing,” Chris Gordon, Bain’s global co-head of private equity, told the Financial Times. “But I think there’s a lot of caution out there in the market as to which strategies are really going to work going forward.”

Bain Capital believes a slower investment regime, in which it invests funds over three to four years instead of half that duration, could lead to stronger returns in the coming years as PE buyers grapple with a possible recession and the impact of artificial intelligence on their portfolios and financing costs.

The firm’s latest fundraising signals that investors are warming to these more steady investment approaches. Bain has just raised $12bn in fee-paying outside capital for its latest US buyout fund, beating an initial target of $10bn set earlier this year. When more than $2bn committed by the firm and its partners is included, Bain raised $14bn for the US buyout, representing a nearly 18 per cent increase from its prior fund.

Gordon said that while Bain’s fund was big enough to chase “the largest transactions,” it was small enough for his investment team to also consider investments in smaller, faster-growing companies.

Bain’s fundraising bucks a trend in which many blue-chip PE firms have fallen short on investment targets set for funds closed between 2022 and 2025.

Private equity fundraising hit record levels in 2021, but has shrunk by nearly a third since then. Many firms raised too much money and invested too quickly at high valuations, but are now struggling to exit investments and their investors are refusing to back new funds.

Rivals such as Blackstone, KKR, Apollo and Carlyle went public and have grown far bigger in size over the past decade. But Bain and other large privately held players have had a stronger reception from investors.

In 2023, Warburg Pincus, among the oldest US PE firms with a history tracing to the 1960s, bucked a weak fundraising market to raise $17.3bn, beating a target of $16bn, as investors embraced its more steady investment approach. CD&R, another old line buyout firm, also significantly exceeded its targets when it raised a $23bn fund that year, the FT reported.

Bain is one of the industry’s largest independent PE firms and manages nearly $200bn in overall assets. It has generated $12.5bn in asset sales, twice what it has invested since the start of 2024. In September, it sold a majority stake in German healthcare group Stada at a $10bn valuation to another PE firm.

David Humphrey, co-head of Bain’s private equity operations in North America, said the firm is closely monitoring the impact of AI on corporate bottom lines.

Humphrey said businesses with labour-intensive industries that employ white-collar professions faced new risks from AI in which large language models could replace their products. Companies that “have some truly proprietary data that nobody else has” or could “drive productivity with AI” stood to succeed, he said.

Deal is latest in busy stretch for private equity-backed software and healthcare-focused technology companies

Qualtrics, the customer service software company owned by private equity group Silver Lake, has struck a deal to buy healthcare-focused technology firm Press Ganey Forsta for $6.75bn including debt, according to people familiar with the matter.

The deal, which is set to be announced on Monday, will help to extend Qualtrics’ artificial intelligence technologies to healthcare clients as it attempts to apply AI to complex, highly regulated industries.

Qualtrics provides everything from automated chat widgets to tools that sift customer feedback to more than 20,000 companies and organisations globally, including Delta Air Lines and Hilton Worldwide.

Press Ganey, meanwhile, is used by over 41,000 hospital systems and healthcare companies to compile feedback from patients and doctors in manual, verbal and digital surveys.

The companies are betting that the combination of Qualtrics’ artificial intelligence technologies with Press Ganey’s reach in the healthcare industry will give rise to new AI-powered tools and services, said people familiar with the matter.

Industry experts have predicted that so-called “vertical” technology companies such as Press Ganey will become increasingly valuable as acquisition targets for AI platforms, given their access to sets of data to train learning algorithms.

Press Ganey’s combination with Qualtrics, a pioneer in applying AI to handle customer services like ordering food online, or rebooking flights and hotel stays, is also meant to bolster its technology offerings as large tech giants such as Palantir and Oracle expand into healthcare, said a person briefed on the matter.

Under the terms of the deal, Press Ganey’s owners — Ares Management and Los Angeles-based private equity group Leonard Green & Partners — will be paid in a combination of cash and privately held Qualtrics stock.

A consortium of 11 banks and private capital firms in total are providing the debt financing for the deal, the sources said.

The takeover is the latest acquisition in a busy stretch for private equity-backed software and health-tech deals, a bright spot in a market where many sponsors have been slow to exit investments for fear of poor returns.

The value private equity-backed software and health-tech deals globally was $571bn worldwide this year to the end of September, the third highest on record, according to data from the London Stock Exchange Group.

The deal, which values Press Ganey at an enterprise value of $6.75bn, marks Qualtrics’ biggest acquisition in its two-decade history. Silver Lake and Canada Pension Plan Investment Board teamed up in 2023 to take Qualtrics private in a $12.5bn buyout.

Qualtrics under chief executive Zig Serafin has turned profitable, generating over $500mn in free cash flow over the past 12 months, the people said.

Silver Lake — which last week agreed to take video games maker Electronic Arts private in the largest leveraged buyout of all time, valued at $55bn — is known as one of the leading private equity investors in technology companies.

It often uses its largest investments like Dell and entertainment company Endeavor as a beachhead for industry consolidation.

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The country leads the world in newly installed industrial robots, far ahead of Japan and the US

China’s factories welcomed 295,000 newly installed industrial robots last year, easing fears the nation’s manufacturing juggernaut could falter after the population declined for a third consecutive year.

The robot boom in the rapidly ageing society is helping offset some of the challenges of a declining workforce and bolstering its manufacturing edge, which is set to sharpen further as humanoid technology matures, analysts said.

China’s population has declined since 2022, with a decrease of 1.39 million last year. But the country now boasts a record 2.027 million active industrial robots, leading the world by a wide margin, according to the 2025 edition of the International Federation of Robotics (IFR) World Robotics Report.

More than half of the world’s 542,000 new robots were installed in Chinese factories in 2024, according to the September report. The machines weld car frames, assemble electronic devices and move heavy loads with precision, filling labour gaps caused by the demographic shift.

“It’s an inevitable trend that more simple, repetitive tasks will be done by robots in the future, though some creative and complex tasks still require human ingenuity,” said Professor Gao Xudong from Tsinghua University’s School of Economics and Management.

“Despite the shrinking overall population, with improvements in workforce education and the widespread use of robots, China’s manufacturing industry has no problem in maintaining and enhancing its competitive edge,” he added.

China’s population fell by about 0.1 per cent last year, according to government data. But robot installations during the same period rose by 5 per cent to 295,000 units, accounting for 54 per cent of new industrial robots worldwide, according to the IFR report.

Japan followed China with 44,500 new installations, while the United States ranked third with 34,200. Total installations globally rose by 9 per cent to 4.664 million in 2024.

Humanoid robots represent the next stage in industrial upgrades. While exact order numbers for the smart machines – which resemble humans – are unavailable, companies are progressing quickly from research and development to commercial-scale deployment.

In August, Guangdong-based Tiantai Robot secured a landmark order for 10,000 humanoid robots – the largest single order in the industry’s history – targeting the country’s elderly care market.

Still, Gao of Tsinghua University said China will still need large numbers of skilled talent to support its intelligent industries, such as robot maintenance technicians.

By 2030, the country is projected to face a shortage of 50 million high-skilled blue-collar workers, according to a report published by China’s Human Resources and Social Security Information Centre in April.