Days after a Bloomberg report indicated Blackstone is hoping to raise at least $3.3 billion to buy passive stakes in alternative asset managers, the New York-based buyout shop has agreed to purchase Clarus, a life sciences firm that focuses on growth investments in biopharmaceutical companies. Clarus will be renamed Blackstone Life Sciences, and Nick Galakatos, a current managing director at Clarus, will be head of the new division.
Why buy Clarus?
With offices in San Francisco and Boston, the firm has developed a niche partnering with pharmacy companies in the final stages of getting FDA approval for their treatments, a process that typically costs at least $100 million, per The Wall Street Journal. Blackstone could provide the capital needed to help bring to market more drugs developed by businesses that are low on late-stage VC funding.
On a broader scale, it makes sense for Stephen Schwarzman's outfit to jump into the life sciences industry. The number of private equity investments in the vertical has increased each year since at least 2010, according to PitchBook data—although that may be set to change in 2018:
Blackstone has been gobbling up stakes in other investors all year. In March, the firm made a minority investment in The Rockpoint Group, a Boston-based real estate investment manager, as well as Kohlberg & Company, a middle-market firm based in New York. In July, the firm teamed with the Goldman Sachs Petershill program to purchase a minority stake in tech investor Francisco Partners, and reports emerged last month that Blackstone was interested in purchasing a minority stake in New Mountain Capital.
Check out our analyst note on the secondaries uptick.