Blackstone
raises three-quarters of targeted $4.6 billion life sciences fund
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[January 10, 2020]
By Rebecca Spalding
(Reuters) - U.S. private equity firm
Blackstone Group Inc <BX.N> has secured $3.4 billion from investors for
its first fund dedicated to investments in the life sciences sector,
targeting $4.6 billion in total, a regulatory filing showed on Thursday.
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At its target fundraising amount, the fund would be one of the
biggest in the sector. The raise underscores investors' strong
appetite for the lucrative returns associated with the development
of high-impact drugs, as well as their tolerance for risk, given
that a therapy's success is far from certain.
Under its new president and chief operating officer, Jon Gray,
Blackstone is seeking to diversify its investments beyond its
traditional private equity, real estate, credit and hedge fund
investments.
Only few private equity firms have had the stomach to place bets on
drug development. Bain Capital and KKR & Co Inc <KKR.N> are other
buyout firms with dedicated healthcare funds.
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Blackstone seeks to mitigate the risks associated with drug
development by funding relatively late-stage programs, which tend to
be more capital-intensive but less risky than earlier phases of drug
development.
Blackstone entered the life sciences industry by buying established
investment firm Clarus in 2018, which had launched four funds
dedicated to the sector. Blackstone's new fund is dubbed Blackstone
Life Sciences V.
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Since it set up a life sciences unit, Blackstone has unveiled a
joint venture with Novartis AG <NOVN.S> to develop a novel heart
treatment and invested $400 million in a bladder cancer gene therapy
in partnership with drug company Ferring.
SFJ Pharmaceuticals, another company backed by Blackstone, partnered
with Apellis Pharmaceuticals Inc <APLS.O> to research a rare disease
drug, which released positive data earlier this month in a
late-stage study.
(Reporting by Rebecca Spalding in New York; Editing by Cynthia
Osterman and Rosalba O'Brien)
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