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Excerpt: The latest development and expansion strategies of Tern portfolio company, Talking Medicines, demonstrate significant momentum and potential in leveraging AI for pharmaceutical marketing and patient intelligence, indicating a promising trajectory for investors and the broader healthcare sector.

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Tern operates a venture capital model focusing on disruptive start-ups. One of their portfolio company, Talking Medicines, specialises in data science and AI to transform patient intelligence collection and analysis. Talking Medicines has recently raised £440k through convertible loan notes to fund its next development phase, particularly its expansion in the U.S. market.

Portfolio Synergy and Value Creation

Tern’s investment in Talking Medicines not only demonstrates confidence in its innovative approach to investing in pharmaceutical industry but also signifies a strategic move to diversify revenue streams and reduce future funding dependencies. With Tern holding a 23.8% stake, valued at £1.8m, Talking Medicines emerges as a ‘jewel in the crown,’ offering a unique AI model to curate patient and healthcare feedback from conversational data, bolstered by its recent launch of Drug-GPT.

The introduction of Drug-GPT underscores Talking Medicines’ forefront position in applying AI to drug development and patient care, capitalising on the surge in interest around Large Language Models (LLMs) like ChatGPT. This specialised model focuses on generating actionable intelligence from diverse data sources, thereby enhancing drug targeting strategies and patient outcomes.

The pharmaceutical sector faces persistent challenges in this space, with estimated annual costs to U.S. companies at $250bn. Talking Medicines addresses this through its curated AI models, providing invaluable patient and professional feedback that is crucial for pharma companies in retaining customers and optimising marketing efforts.

Strategic Partnerships and Expansion

With a strategic pivot towards U.S. healthcare marketing agencies, Talking Medicines is expanding its footprint, particularly in New Jersey, to capitalise on the proximity to a concentration of healthcare agencies. This move is part of a broader strategy to ‘land and expand,’ aiming to become the AI partner of choice for healthcare marketing, leveraging its Drug-GPT solution.

The company’s revenue model, focused on platform sales, alongside its strategic presence in the U.S. market, positions Talking Medicines to tap into a significant addressable market, estimated at $30bn. The expected step change in revenue for 2024, driven by new client acquisitions and subscription models, underscores the high-growth potential of Talking Medicines’ AI solutions.

Outlook

Talking Medicines’ trajectory is emblematic of a broader trend in the pharmaceutical industry towards data-driven, AI-enhanced patient care and marketing strategies. The company’s use of AI, particularly through Drug-GPT, positions it as a pivotal player in transforming how pharmaceutical companies engage with patients and healthcare professionals.

Tern’s strategic investment in Talking Medicines reflects a judicious approach to portfolio management, focusing on high-growth, technologically advanced companies that address critical industry challenges. The venture capital model employed by Tern, coupling financial support with strategic guidance, facilitates a nurturing environment for portfolio companies, fostering innovation and growth.

As Talking Medicines continues to evolve and expand its offerings, the potential for significant revenue growth, especially in the lucrative U.S. market, becomes increasingly apparent. This growth trajectory not only benefits Tern’s investment portfolio but also signals a promising direction for the application of AI in healthcare, offering insights into patient behaviour and preferences that can revolutionise pharmaceutical marketing and patient engagement strategies.