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Blackstone Fuels Life Sciences With $6.3B Mega-Fund
30 Mar
Summary
- Blackstone's latest life sciences fund closed with $6.3 billion.
- The fund is larger than the previous vintage, which closed with $4.6 billion.
- The firm finances the final stages of clinical development for products.
Blackstone Inc. has successfully closed its latest life-sciences fund, Blackstone Life Sciences VI, amassing $6.3 billion in commitments. This marks the firm's largest fund to date dedicated to backing the clinical trials of innovative medicines and technologies.
The new fund is notably larger than the previous vintage, Blackstone Life Sciences V, which secured $4.6 billion when it closed in 2020. The firm's life-sciences division, under the leadership of Nicholas Galakatos, specializes in financing the crucial final stages of product development in partnership with pharmaceutical, medical-technology, and biotech companies.
Galakatos highlighted that the firm has committed $2 billion over the past year to products with the potential for significant patient impact, addressing a substantial funding deficit in the sector. He noted that the annual gap between capital demand and supply for such trials exceeds $100 billion.
Blackstone's revenue model includes milestone payments and royalties, which are generated after product launch and achieving sales thresholds. The firm then sells these royalties to investors or originator companies, establishing itself as a leading player in this market. The preceding fund, Blackstone Life Sciences V, delivered an 18% net internal rate of return as of December 31, with the division managing $15 billion in assets.
