Explaining Private Equity's Increased Appetite For Drug Development

By Jordan Cohen

When private equity (PE) and healthcare are mentioned, the first thing that typically comes to mind is investment in physician platforms, skilled nursing facilities, and other patient-facing service providers. However, in recent years, PE firms have shown a growing interest in pharmaceutical drug development. This is evidenced by a slew of billion-dollar investments, including Blackstone’s 2018 acquisition of life sciences investment firm Clarus, EQT’s acquisition of Life Sciences Partners in 2021, and Carlyle’s acquisition of Abingworth last year. J.P. Morgan also announced late last year that it will launch a life sciences-focused PE fund.