Look out Big Pharma; Big Finance is coming into drug development in a big way—enter Blackstone. An American multinational private equity giant, the New York City-based venture is the largest alternative investment house in the world. As of 2019 the company had about $470 billion under management.
Rebecca Spalding of Bloomberg recently reported the investment giant seeks to leverage its “considerable financial muscle” to win where event big pharma needs help—taking treatments from bench to bedside. As they survey the drug development landscape they seek to insert themselves into the financial supply chain by becoming a source of capital (equity and debt) for big pharma. Of note, Ms. Spalding informs us that last year Blackstone acquired Clarus, a leading boutique life science investment firm. Clarus (now known as Blackstone Life Sciences) had established a niche financing biopharma R&D ventures that were successfully raised initial funds but were struggling to secure second or third rounds.
Joe Baratta, global head of private equity was quoted in the Bloomberg article “the opportunity here is potentially really large.” Baratta told interviewers Blackstone seeks to become a “go-to source of capital for large pharmaceutical companies bringing new treatments to patients.”
Clarus apparently was successful but relatively small—it closed its latest fund at $1 billion and faced very real financial constraints. Its average investment totaled $100 million. Of course Blackstone changes all of that with $500 billion. Blackstone’s new life science group is “stocked” with drug development executives including former Genentech and Ariad CEOs.
The drug development race should get interesting. Big pharma doesn’t develop as much IP in house anymore. Through a combination of academic medical center, therapeutic non-profit networks, government sponsored research and nimble biotechs (including disruptive new cell therapy and gene therapy entrants) the market is unfolding in a relatively fast an complex tangle of networks, institution, intellectual property rights and emerging forces such as Chinese research.
Consequently the landscape does become more conducive to private equity change agents who are not only rapidly investing in the necessary knowledge/human capital but also possess core deal making acumen DNA. This next decade will become truly intriguing time for drug development. Those big pharmas truly internalize this unfolding reality—and adjust and staff to capitalize on the changes—will be more successful than those maintaining the status quo. TrialSite News commits to contributing to clinical trials transparency—this includes opening up deal making opportunities for research sites are developing next generation therapies and treatments. We include some key Blackstone contacts.
Some key players at Blackstone Life Sciences include:
Craig Shepherd, Sr. Director
Nicholas Galakatos, Sr. Managing Director
Emmett Cunningham, Director
Paris Panayiotopoulos, ManagerSource: Bloomberg