Life Sciences Private Equity

Question

Which firms are the best for life sciences in the private equity space? Would love to get the perspective of anyone currently in this space and where they see things going in the next few years in the life sciences?

Biotech-wizard · Accepted Answer

Blackstone basically invests across the capital structure of established life sciences firms with main focus being product financing (i.e royalty). They usually find a drug target usually in PhaseII/III that they believe has a high probability of success or a high untapped market. The capital they invest is deployed only when different milestones are achieved e.g drug moves to next phase, or preliminary data suggesting that the drug is likely to succeed. Then they take royalties (top line) provided that drug target gets approved and reaches the clinic.

Biotech-wizard · Answer

From second hand discussions, I know that they pay the same for Snr Assoc. In terms of carry, I am not sure. It’s hard to say because if they are purely paying out of profits they make from royalties you can imagine that it’s not a buy and sell business like LBOs but more of a fixed income business where profits come in every year for around 8-10 years (or as long as the patent lasts). However, if I had to guess I would think they pay in the same way as they do with their other businesses.

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Life Sciences Private Equity

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Life Sciences Private Equity

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