Blackstone Raises Largest Life Sciences PEG Fund in History & Already Putting Capital to Work: Should Big Pharma be Nervous?

Blackstone Raises Largest Life Sciences PEG Fund in History & Already Putting Capital to Work Should Big Pharma be Nervous

Blackstone has raised more all purpose investment funds than another other private equity group in the United States.  With the closing of Blackstone Life Sciences V (“BXLS V”), this “inaugural” fund was “oversubscribed” and closed at $4.6 billion of total capital commitments. Blackstone just established itself as the king of life sciences investors. In generally hard times for many, vast pools of capital now compete for the most important clinical research breakthroughs. With this new class of competitor in drug development, should big pharma be nervous?

Nicholas Galakatos, PhD, Global Head of Blackstone Life Sciences, leads the largest investor in their quest to find those companies that bring new treatments and cures to patients around the world. Investors want in. Galakatos notes, “with many more promising products in the life sciences industry’s pipeline than capital available to advance them, we look forward to continuing to bring new treatment options and innovations to the patients who need them.”

Blackstone Life Science Investment Strategy

The private equity giant, led by Mr. Galakatos drives forward based on a three-pronged strategy, including 1) strategic collaborations with life science firms, 2) late-stage product financings, and 3) growth investments in emerging companies.

Sample Investments

The investor has already put nearly billions to work including:

·         A $2 billion strategic collaboration with Alnylam, a leading biotech company and the largest private financing of a pre-profitability stage biotech on record. As part of this deal, Blackstone received 50% cut of the royalties on its Novartis partnered cholesterol fighter known as inclisiran.

·         A 350 million investment in Reata Pharmaceuticals to advance the first potential medicine for Alport Syndrome, a kidney disease afflicting children

·         A $337 million strategic collaboration with major medical device company Medtronic to advance their next generation of diabetes management products.

Will the Model Work?

A new class of competitor has entered the market: a large, aggressive and sophisticated private equity group that in some cases will complement big pharma and in other cases will compete for high value biotech deals for example. 

In cases such as Alnylam, deal structures are designed to bring transformative potential for patients worldwide. A key agenda here is to bring the company, via its financing and deal making prowess, to a self-sustaining financial reality allowing for commercialization without the need to access equity markets. A win-win: patients get new transformative medicine, limited partners receive healthy returns and Blackstone accumulates more capital to do it all over again.

About Blackstone Life Sciences

They are a private, global investment platform developing the capabilities to invest across the life-cycle of companies and products within the key life sciences sectors. By bringing together scale investments and hands-on operational leadership, this group will not only improve the odds of transformative medicine commercialization but in the process perhaps, shake up the drug development industry in a good and meaningful way. The group has 26 MDs, PhDs on the team and with the acquisition of Mr. Galakatos’ firm, the collective team now has experience bringing 94 drugs to market.


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