Abu Dhabi's M42 open to IPO as healthcare company expands portfolio

It is considering potential collaborations as well as acquisitions, chief executive says

Hasan Al Nowais, managing director and group chief executive of M42, says the company wants to be a leader in reducing the healthcare sector's carbon footprint. Khushnum Bhandari / The National

Abu Dhabi technology-enabled healthcare company M42 will consider an initial public offering in the future as it accelerates its expansion, its managing director and group chief executive has said.

The potential listing would support M42's growth, as it seeks partnerships to address healthcare sector demands, Hasan Al Nowais told The National.

"We're always open [to an IPO]. No commitments, no announcements so far, but we're evolving very quickly and at the right time, it's definitely something we'll consider," he said.

M42 was launched this year as a result of a merger between the healthcare units of Mubadala and artificial intelligence company G42.

The company is open to "potentially collaborating with, acquiring, or partnering" with other organisations to grow its footprint, although the current focus remains on integrating the business, Mr Al Nowais said.

In April, M42 acquired Sweden-based dialysis provider Diaverum from Bridgepoint Group as part of its global expansion strategy.

"We are an evolving company. Health care is an evolving industry, so there is something new every day, whether it's a new technology or a new drug," he said.

M42's plans for a potential listing come amid a flurry of listings in the Mena region on strong investor demand. The volume of IPOs on Mena bourses climbed by 44 per cent annually in the second quarter of 2023 during a period of robust economic growth, according to global consultancy EY.

The number of listings rose to 13 during the three-month period to the end of June, bucking the global slowdown in equity capital markets activity, it said.

Presight AI, another unit of G42 focused on data analytics and AI, drew Dh94.9 billion ($25.8 billion) in bids for its IPO in March, raising $496 million for the company.

In terms of operations, M42 is currently focusing on digital health and associated services, and recently unveiled its own generative AI large language model, Med42.

Med42, launched last month, is trained with more than 70 billion parameters and designed to respond to medical prompts and questions "ethically, safely and efficiently", according to the company.

Downloads for the clinical LLM, the first from Abu Dhabi, "exceeded our expectations", Mr Al Nowais said.

Med42 is also open source, which promotes transparency and allows M42 to quickly adapt to any changes to boost the service's reliability, he said.

"We wanted people to continue to test it and come back to us with feedback for us to improve on, unlike other LLMs, which are closed ... more importantly, this provides the level of transparency that's required," Mr Al Nowais said.

"We're constantly being kept in check in everything we're trying to do, from a data privacy standpoint and the technologies we launch. We're open to being criticised and improving the technology that we have."

Globally, the healthcare industry is adopting new technology as consumers seek more on-demand and convenient services.

Generative AI has become a go-to service for industry players because it helps to streamline operations and customer engagement.

The global digital health market is projected to reach about $826 billion by 2030, from an estimated $211 billion last year, growing at a compound annual rate of 18.6 per cent, data from Grand View Research shows.

Cop28 agenda

Health care contributes about 4.4 per cent of global emissions – meaning that if it were a country, it would be the world's fifth-largest emitter, according to a study by the non-government organisation Healthcare Without Harm and UK consultancy Arup.

To address the issue, M42 will be hosting a dedicated health day at the Cop28 climate conference in Dubai on December 3, featuring discussions between key players in the health care, technology and sustainability sectors.

The event is a first for Cop and M42 said it aims to boost co-operation in the healthcare industry's role in the fight against climate change.

"We're really looking at addressing a problem the world is dealing with at the moment, which is the reduction of the carbon footprint globally," Mr Al Nowais said.

"We know and we recognise we were part of the problem. Now we want to lead the solution or be part of leading the solution going forward."

Cop28 is a "stepping stone" in M42's efforts to create a unified front in health care to tackle sustainability issues, Mr Al Nowais said.

"We expect Cop to be a Cop of action and a lot of commitment, whether it be from companies, governments, or individuals to help address a serious problem the world's dealing with," he said.