Clarus, an investment firm that has raised $2.6 billion to bankroll drug makers and other health care companies since 2005, is being bought by Blackstone, a private equity firm that is one of the largest owners of life science office space in the world.
The acquisition of Clarus, which is based in Boston and San Francisco, was announced Thursday. No financial details were disclosed.
New York-based Blackstone, which has already invested in health care ventures, plans to create Blackstone Life Sciences, a private investment company that would fund pharmaceutical firms in various stages of drug development.
Nick Galakatos, managing director and co-founder of Clarus, will head the new company. It will remain in Boston and San Francisco, the nation’s two leading biotech hubs, where Clarus has a total of 23 employees. Galakatos said that number is expected to grow.
“We’re very excited,” said Galakatos, a 60-year-old Massachusetts Institute of Technology-trained chemist. “The teams at both Clarus and Blackstone are thrilled to be able to work together.”
Jon Gray, president and chief operating officer of Blackstone, said the life sciences sector is booming and there is an urgent need for funding.
“This is a unique moment where rapid advancements in science and technology are creating unprecedented innovation and unparalleled impact on human health,” he said. “Building on the foundation of the world-class Clarus team, Blackstone Life Sciences is uniquely suited to provide much needed capital and expertise to this sector.”
Clarus has raised $2.6 billion since it was founded 13 years ago, including $910 million announced last year for a fund to help pharmaceutical companies win approval for promising late-stage drugs.
Since 2009, the firm has shifted its strategy from investing in startups to making “risk-sharing partnerships” with big pharmaceutical companies. Clarus identifies promising drugs that are in phase 3 clinical trials, the final stage necessary to gain approval from the Food and Drug Administration. Clarus then pledges to fund, and in many cases, oversee the final testing of these drugs for safety and effectiveness in order to win FDA approval.
If the medicine reaches certain benchmarks or wins approval, the pharmaceutical company will pay Clarus a pre-negotiated amount of cash or royalties on sales, or both.
Clarus has invested in more than 50 companies in the biopharmaceutical, medical device, and diagnostic sectors — as well as across multiple disease areas, primarily in oncology. Among the medicines it funded is Vizimpro, a treatment for a rare form of lung cancer. Pfizer Inc. last week was granted FDA approval of that drug.
Blackstone has made extensive forays in the health care sector, investing over $19 billion in more than 40 deals. Its acquisition of Clarus is expected to close in the fourth quarter of this year.
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