JPMorgan Joins Gates, Drugmakers in Fund to Fight Disease

JPMorgan Chase & Co. and the Bill & Melinda Gates Foundation formed an investment fund that will back late-stage development of technologies to fight killer diseases in low-income countries.

A group of investors including the Canadian and German governments and the Children’s Investment Fund Foundation committed $94 million to the fund. The International Finance Corp., GlaxoSmithKline Plc, Merck & Co., Pfizer Inc.’s foundation, Storebrand ASA and JPMorgan Chase also invested. The Global Health Investment Fund will support the development of drugs that would both benefit low-income countries and have a potential for profit in the developed world. Examples include treatments for malaria, tuberculosis and HIV, as well as maternal and infant mortality, according to a statement.

The private financing seeks to address the fact that global health funding barely grew last year. The U.S. and other governments cut their aid to programs in developing nations by 4.4 percent, according to the Institute for Health Metrics and Evaluation.

Charitable funding has helped advance the development of medicines that drug companies might not otherwise be able to justify to investors. In 2000, a “small handful” of drugs were being developed to treat diseases affecting low-income countries, according to Julie Sunderland, director of program-related investments at the Gates Foundation. Today, she said, there are about 200.

Finishing Line

“There is a lot happening; there is just not enough capital to bring those products to the finishing line,” Sunderland said on a conference call today. “The theory here is that there is financial value in developing these products.”

Given the risks of investing in the clinical development of new technologies, the Gates Foundation and the Swedish International Development Cooperation Agency will partially offset potential losses in the fund, which will seek a financial return for investors by targeting technologies with public-health applications in both developed and emerging markets.

Lion’s Head Global Partners LLP, a London-based asset manager specializing in sustainable development, will be responsible for originating, managing and exiting the fund’s portfolio investments.

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