AlphaLab Health, a joint effort between Innovation Works and Allegheny Health Network to fund life sciences research, has received a $10 million dollar grant from an anonymous donor. The money will be used to establish a revolving investment fund that will invest in over 60 companies in the next 10 years.
"We have [historical] data in terms of investment returns as it relates to all verticals but particularly life sciences because we have been investing in life sciences in the region for some time," Ven Raju, Innovation Works CEO, said. "Investment returns can be lumpy and hard to predict so we took a very conservative approach in terms of projecting out this revolving investment fund."
According to Jeffrey Cohen, chief physician executive of community health and innovation at AHN, an economic feasibility study modeled for the grant showed that Allegheny County could see a $960 million economic impact from the fund over the next 27 years.
"This is essentially a 50 times return for the county over the next generation," Cohen said. "Pittsburgh has got a great integrated medical care community with Highmark and AHN as well as UPMC. There's expertise across the board in the region and what innovators need is reality testing of their ideas."
For years, Pittsburgh has had a reputation as a hub for education and medicine, but in recent years the technology sector has gained prominence. This is due largely in part to advancements and interest in artificial intelligence. Raju said that overlap between artificial intelligence and health care could lead to substantial economic growth for the region.
"We have a terrific life sciences cluster... which lends itself to tremendous scientific and tech talent that is in the region," Raju said. "There's biotech, but I would also note digital health, the cross pollination between artificial intelligence large language models with needs in healthcare is an area where my hope and expectation is that we will see a growth."
Additional funds to the program have been contributed by AHN, Innovation Works and the Suburban General Healthcare Foundation.
"This is a team sport and as medicine is changing rapidly from the model we have been in for the last 70 years, people are actively looking for solutions to problems in healthcare and innovation is one of the ways that you can get there," Cohen said.
AlphaLab Health has previously provided early-stage funding and additional resources to 25 startup companies in the Southwestern Pennsylvania region.
"Needless to say, we're very excited about this," Raju said. "AlphaLab Health is essential to our commitment to the life sciences cluster in the region and this ensures for the long term that Innovation Works and AHN can make substantive investments in early stage life sciences companies here in the region."
