- Blackstone has closed what it claims is the largest-ever private equity fund for life sciences investing, with $4.6 billion at its disposal as of Thursday.
- Before the close, Blackstone had already invested an estimated $1 billion of the fund's money. In April, the New York-based firm and genetic medicine developer Alnylam Pharmaceuticals entered into a licensing and financing deal worth as much as $2 billion overall. Two months later, it inked separate deals with Reata Pharmaceuticals and devices maker Medtronic valued respectively at $350 million and $337 million.
- Blackstone's head of life sciences, Nicholas Galakatos, said the rest of the fund will be directed toward three areas: established life science companies, late-stage product financings and growth investments in emerging companies.
Compared to other private equity investors like KKR and even Bain Capital, Blackstone is relatively new to the life sciences sector. Its major foothold came in late 2018 through the acquisition of healthcare-focused investment firm Clarus.
Blackstone has moved quickly since then, locking down a string of deals and a few early victories. In early 2019, it partnered with Swiss pharma giant Novartis to launch Anthos Therapeutics, a biotech meant to develop targeted therapies for high-risk cardiovascular patients. And this past December, a Blackstone-backed company called FerGene announced positive data for its bladder cancer gene therapy.
Blackstone's investments have come as private equity on the whole became more entrenched in healthcare more broadly. Data from Pitchbook, as reported in Healthcare Dive, shows that private equity deals in the space more than doubled between 2008 and 2018. By that latter year, deals had reached 788 in number and upward of $100 billion in total value.
Private equity can provide the money required for small companies to grow to their next stages, or for struggling biotechs to mount a return. Yet there are also concerns that the very model these firms use to make a profit will have — or is already having — negative effects on some healthcare companies and the patients they aim to treat.
Blackstone's Galakatos, however, argues the firm is helping to solve one of the sector's larger issues, noting in a July 9 statement that there are "many more promising products in the life sciences industry's pipeline than capital available to advance them."
In addition to the life sciences, Blackstone invests in real estate, insurance and infrastructure. In 2019, the firm recorded $7.3 billion in revenue and $3.9 billion in net income, increases of 7% and 18% from the previous year. Blackstone said it was managing $571 billion worth of assets as of Dec. 31.