Blackstone joins other big investors such as ARCH Venture Partners and Bain Capital Life Sciences in pumping billions of dollars into the industry.
Alternative investment management firm Blackstone on Thursday announced that it is raising a new multi-billion-dollar fund to support companies in the life sciences.
In an investor call to announce the firm’s fourth-quarter and full-year results, president and chief operating officer Jonathan Gray revealed that Blackstone is currently raising a life sciences-focused fund of at least $5 billion, of which it has secured “initial closings of $1.6 billion.”
If Blackstone meets its fundraising target, this new life sciences fund will approximately match its prior commitment in 2020, which racked up $4.6 billion to pump into emerging players, established companies and late-stage product financings. According to Blackstone’s website, its life sciences push has helped usher more than 160 medicines to the market, with an 85% Phase III success rate.
In 2024, Blackstone’s life sciences platform delivered “standout” performance, Chief Financial Officer Michael Chae said on the call, hitting a 33% appreciation rate for the full year and delivering several “positive milestones for multiple treatments under development.”
With Thursday’s announcement, Blackstone joins the ranks of a growing number of investment firms that have raised hundreds of millions—if not billions—of dollars to support the biopharma industry.
In September 2024, for instance, ARCH Venture Partners closed its eighth life sciences fund, counting $3 billion in capital to support companies focused on AI and data-driven drug development. ARCH has a rich history in biopharma, having been a major supporter of buzzy companies such as up-and-coming obesity player Metsera, as well as Xaira Therapeutics, ArsenalBio and Mirador Therapeutics.
The same month, Bain Capital Life Sciences matched ARCH’s raise with a $3 billion fund of its own, earmarked for biopharma players working on “transformative medicines, medical devices, diagnostics, and life sciences tools that have the potential to improve the lives of patients with unmet medical needs.” It did not reveal specific funding priorities. Bain has pumped approximately $6.7 billion into the industry since its founding in 2016.
Earlier in 2024, Foresite Capital closed a $900 million funding round for “groundbreaking” technologies at the nexus of biotechnology and technology, while Sands Capital raised $555 million to support “private companies helping transform how diseases are defined, diagnosed and treated.”
While big outfits like Blackstone, ARCH and Bain are able to amass billions of dollars, they tend to support a small number of companies working on de-risked technologies, and which have already done extensive studies on their technologies. Meanwhile, smaller biotechs, particularly those with relatively unknown leaders, have to seek out more daring venture capitals who are willing to bet on less-established science.
In an October 2024 analysis, several investors told BioSpace that while these massive funding rounds are helpful for the industry, they do not paint a complete picture of the biotech landscape. In particular, they miss smaller and preclinical companies advancing more experimental platforms.
“A lot of dollars are being raised. Where they’re going to really matters,” Sara Choi, partner at Wing venture Capital, told BioSpace at the time. “I would like to see more funding at the pure-play series B stage, because to me, that’s where the drop off is happening.”
