BioNTech + Instadeep = a Euro Tech Champ

This week’s deal which has seen the German vaccine pioneer BioNTech take over InstaDeep feels like a big moment - for healthtech, for AI and for Europe as a contender in the battle to dominate this technology.

BioNTech, the company behind the Pfizer Covid vaccine, paid £562 million for InstaDeep because it hopes its machine learning technology for drug discovery will cut the time and cost involved in identifying promising new medicines. The German company, founded by a husband and wife team with Turkish roots, is  ploughing most of its profits from the Covid vaccine into finding new treatments for cancer. It signed an agreement with the UK government recently to trial cancer vaccines which could offer 10,000 patients personalised treatment.

There has been a huge amount of hype around the potential for AI in healthcare with many big tech names involved, from IBM’s Watson programme to Google and Microsoft’s work on automating the analysis of scans. But so far there has been little evidence of spectacular success, either in the deployment of AI at the clinical frontline or as a commercial proposition. IBM decided to offload Watson Health and getting AI algorithms out of the labs and into use triaging millions of scans has proved a slow old business.

But by paying over half a billion pounds for InstaDeep, a company founded in 2014, BioNTech is placing a vote of confidence in its machine learning capabilities. And it’s not buying an unknown quantity - the two companies have already collaborated on a system to predict future variants of Covid.

Instadeep appears much further down the track from blue skies research to commercial tech business than another London-based AI startup DeepMind was when it was acquired by Google in 2014 for £400 million. Since then, the company founded by Demis Hassabis has delivered huge value to its parent in terms of groundbreaking research, including some with big potential in healthcare such as its work on protein folding. But, nine years on, it shows few signs of becoming a moneyspinner, although it did record its first profit in 2021 - with all of its revenues coming from other Alphabet properties using its technology rather than any external clients.

What the founders of  DeepMind and InstaDeep have in common is that they built world-class AI businesses in the UK, but then sold to overseas giants - arguably before they had shown their full potential.  Allowing the sale of DeepMind to Google for what Dominic Cummings described as “trivial money” was later seen - and not just by Boris Jonson’s erratic guru- as a mistake which showed that the UK did not understand the importance of strategic technologies such as AI or semiconductors.

Now, it is hard enough to work out what grounds David Cameron’s government would have had to intervene to prevent the sale of DeepMind to Google.But even if the mood on protecting British tech assets has changed - witness the blocking of the sale to China of the UK’s biggest chip maker Newport Wafer - you can be sure there’ll be no intervention in InstaDeep’s future. 

The company was after all founded in Tunisia, is proud of its African roots, and while headquartered in London, has offices in Paris, Tunis, Lagos, Cape Town and Dubai. Now it is going to be part of a brilliant German business with world beating innovations, a new European tech champion with strong ties to the UK. Something to celebrate surely??