Rahul Sood 00:05
Welcome to Pathfinders in Biopharma, a podcast series from RBC Capital Markets where we uncover the key trends and catalysts shaping the fast-moving world of biotech and pharma. I'm Rahul Sood, Managing Director in the Healthcare Investment Banking Group at RBC.
Today, I'm thrilled to welcome Paris Panayiotopoulos, Senior Managing Director at Blackstone Life Sciences and a member of its Investment Committee. Paris joined Blackstone in 2018 through its acquisition of Clarus, where he served as Operating Partner. Over his career, he’s led and shaped major companies across the biopharma ecosystem — from serving as CEO and President of Ariad Pharmaceuticals, to leading U.S. and Japan operations at Merck KGaA/Serono, and helping launch and guide ventures like Anthos Therapeutics, Genevant, and AvenCell.
He’s here to talk about how Blackstone Life Sciences is helping bridge the gap between scientific innovation and late-stage development, backing numerous drug programs to date and driving high-impact partnerships that are reshaping how breakthrough medicines reach patients.
Paris, great to have you.
Paris Panayiotopoulos 01:11
Thank you again for having me, Rahul. It's great to be here.
Rahul Sood 01:14
Blackstone Life Sciences has carved out a unique niche, partnering with pharma biotech to fund late stage assets and oversee trials. How has your vision for Blackstone Life Sciences evolved since you came on board, and what big unmet needs are you aiming to address today?
Paris Panayiotopoulos 01:29
So I'm sitting here today, I'm in Cambridge, Massachusetts, many would say that it's the center of biopharma innovation, and we have our roots in a firm called Clarus, which Blackstone acquired at the back end of 2018. Today, we have over $10 billion in AUM, and we largely focus on providing market uncorrelated returns to our investors, and we do that through funding highly innovative products at the top biopharma and med tech companies worldwide, and in turn, offering patients with high unmet need the potential for better and longer lives. Our phase three success rate has been 85% when compared to the industry average of 48% and some examples of companies that we've collaborated with include Pfizer, Sanofi, Novartis, Merck, Takeda, Moderna, UCB, Alnylam to name just a few. So under our collaboration strategy, we seek to fund registration enabling studies, which historically speaking represent the most capital intensive as well as the least risky stage of clinical development. And really the need here is that biopharma companies face significant financial challenges in developing new products due to the increase in R&D costs and funding constraints. Many large pharma and medtech companies, despite typically having strong balance sheets and large R&D budgets, can't fund all the innovation in their pipelines. So our collaboration strategy is geared to fund or co-fund the late stage development of core franchise products owned by these large established companies by assuming development risk, providing our deep R&D expertise as well as P&L relief at a time when our funded products are not generating sales for our partners. The second important part of our strategy to which we deploy less capital is what we call our ownership strategy. So the ownership strategy focuses on acquiring clinical assets that have potential for high returns but are considered non-core by their original owners. We take a hands on approach, and we aim for control equity positions, and we're fully responsible for the operational management of the new code. And then last we do have another very different strategy that focuses on acquiring commercial royalties and providing debt, and that's primarily to biotech companies that are looking for non-equity dilutive capital solutions. And, last, we've now focused on our strategy for many years and driven success across multiple partnerships. So our partners trust us with our products and rely on our expertise, which is, frankly speaking, great way to collaborate with them.
Rahul Sood 04:37
Paris, that's quite a unique depth and breadth of experiences that your team brings. You talked about the Phase III success rate of 85% which is phenomenal. How do you balance the selective governance, operational involvement and risk to hit those impressive outcomes that you talked about?
Paris Panayiotopoulos 04:55
Yeah, good question. We believe that our Phase III success rate is largely driven by a few key factors. First, it's our team. We have deep life science, investing and operating expertise, both on the business and the R&D side. We have 14 former CEOs, 22 MD PhDs, and collectively, across our careers, we've worked on over 200 products that have been approved. Second, we have a thorough diligence process where we assemble deal teams with the most relevant business and R&D expertise in any given therapeutic area and modality that we're working on, as well as many external advisors to review the opportunity. Third, we select partners that are typically well financed and experienced to undertake the development of the product, such as Pfizer, Sanofi, Takeda, Medtronic and others. And where we form new companies to develop the asset, our partners are very reliable and well resourced, like, for example, Novartis, Merck, UCB Pharma. We hire the best executives we can find in the industry, we have control ownership, and typically have board roles to best govern and support our management teams. And then fourth, we work with our partners to develop R&D plans, that increase that probability of success of our funded product as much as possible. Overall, we have a big funnel through due diligence products and a small number actually make it through. We really try to have a strong eye for quality and carefully select the assets that we back, and our team is interacting constantly with the scientific world to understand the landscape and what that results in is rich, proprietary and high quality deal flow of opportunities.
Rahul Sood 06:55
Very insightful, Paris. Let's chat a little bit about the ownership strategy. I believe Anthos was a great example of that. It was built around abelacimab, it was born from Novartis, funded by Blackstone Life Sciences, and just recently acquired by Novartis for up to $3.1 billion. That's a phenomenal outcome. What does that say about your model's ability to create standalone companies, de risk these assets and deliver an outsized value to all stakeholders.
Paris Panayiotopoulos 07:25
And the asset is mainly focused on stroke prevention in patients with atrial fibrillation, which is quite a common cardiovascular condition. Actually a fun fact is that Anthos, in Greek, means flower. And when I was first looking at what to name the new company, we had strong conviction that the asset was going to be successful given the genetically validated mechanism of action and the available data. So, nothing seemed more fitting than a flower that was going to bloom. Anthos was a significant control investment by Blackstone Life Sciences. We formed the company, built the team. We had three board seats, myself and my partners, Nick Galakatos and Dr Ari Brettman. And we designed the initial development plan. The asset abelacimab, in its Phase II, demonstrated between 62% and 89% lower bleeding across multiple endpoints, including the primary endpoint and major and GI bleeds, when compared to the standard of care Xarelto, and achieved two publications in the New England Journal of Medicine. It was a great outcome for Blackstone Life Sciences. For Blackstone, more broadly, we sold the company for $3.1 billion, and then we also enabled a large pharma company like Novartis, with deep expertise in the asset, as it originally came from them, but as well as strong, broad cardiovascular commercial capabilities, to ultimately maximize its potential.
Rahul Sood 09:07
If you can spend a bit of time on your third strategy, which involves backing major royalty, product financing and debt structures. How do you view these models as alternatives to equity investments, and what advantages do they offer to companies across the size spectrum?
Paris Panayiotopoulos 09:24
Yeah, when you think about larger biotech companies, where they believe that their market valuation has room for growth, our non-equity dilutive financing make a lot of sense. So our investment in Alnylam in April 2020 really marked our largest biotech sector transaction. We invested a total of $2 billion, this included $1 billion to acquire 50% of Alnylam’s royalty interest in the global sales of Novartis Leqvio, a treatment for elevated LDL cholesterol, developed by Alnylam using RNAi technology and then licensed to Novartis. And our investment was after Leqvio had shown that it could reduce LDL by over 50% with administration frequency of only twice per year. However, at the time of the investment, it hadn't yet been approved, and this was the key risk that we were underwriting, together with the commercial risk of course. It subsequently was approved, its sales reached over $750 million last year, and per consensus, it has the potential to achieve multi-billion dollar peak sales. Additionally, we provided $750 million of credit to the company, as well as doing two product financings on Vutrisiran for a condition called ATTR, which has since been approved. And Zilebesiran ran for hypertension, which Alnylam is now partnering with Roche. There was also very small, equity investment. But overall this was a real win-win for both Blackstone Life Sciences and Alnylam, their market cap is a multiple of where it was in 2020, when we invested in them. So we help them grow while ensuring that their shareholders were not diluted as part of the royalty debt and product financing components of our deal.
Rahul Sood 11:31
So when you look at the biopharma landscape today, what kind of opportunities are uniquely visible and attractive to a platform at your scale?
Paris Panayiotopoulos 11:41
Our scale and expertise do offer biopharma and medtech companies that need to invest in their core products, however, don't have the full room in their P&L to do so, a way to bring that meaningful innovations to patients with BXLS investment as part of our collaboration strategy. Our scale provides hundreds of millions of dollars that are required to run their often multiple registration phase trials and our expertise helps them work with us as a sounding board, with the aim to maximize their and our probability of success of that of the trials, and ultimately get what would be de-prioritized or delayed programs to patients as soon as possible. Our scale and expertise enable us to source new co-creation opportunities with assets that are very promising, however non-core to biopharma companies, and the biopharma company then benefits from sharing in part of those economics. And then, in addition, as part of our post product approval strategy, we also source debt and commercial royalty acquisition opportunities. So, to your question, we have visibility to a very healthy number of opportunities, as we believe that the R&D annual funding gap between what pharma and medtech companies have to deploy and their pipeline needs is significant, and also many biotechs are in need of non-equity, dilutive capital in what's currently down market with low valuations. This is a very innovative period in the history of medicine and device development where, in addition to exciting technologies, AI has the potential to change R&D process, productivity and assets’ probability of success significantly.
Rahul Sood 13:46
Paris, you've helped lead efforts across oncology, cardiovascular, rare disease and more. As you look across the life sciences landscape today, where do you see the biggest white spaces?
Paris Panayiotopoulos 14:00
At the technology level, we see massive white space in targeted therapies. These have accelerated dramatically in recent years due to advances in genomic and proteomic research, and we also look closely at novel technology platforms that are capable of generating clinical data across a variety of diseases, for example, RNA based. And at a portfolio level, we’re somewhat agnostic to therapeutic area and treatment modality. And what really matters most is that we fund products, ideally blockbuster products, with sales of over a billion dollars that are very likely to achieve regulatory approval with a good product profile and that satisfy enough unmet need in the market to generate stable uncorrelated returns that we can underwrite with a high degree of conviction.
Rahul Sood 15:08
When you were building Anthos and other companies that are part of your ownership strategy, how do you think about aligning development timelines, the strategic exit pathways, the portfolio return expectations, and how does that all shape your investment criteria today?
Paris Panayiotopoulos 15:24
Certainly as an investor, it's something that we keep in mind, of course, and again, we come back to the benefit of our private capital model. We have long time horizons. We stay committed to the companies we invest in, and importantly, we're not subject to the ups and downs of the public markets of which there are many. We, of course, try to keep an open, flexible playbook. We're open to many different pathways for our companies. However, overall, we believe that our committed private capital is a major benefit here.
Rahul Sood 16:02
Paris, from Lilly to Merck KGaA to Ariad to Claris and now Blackstone Life Sciences, it's been quite a journey. What core leadership frameworks do you bring into building a successful life sciences-backed business, if you can share your perspectives on that?
Paris Panayiotopoulos 16:17
Similar to many of my BXLS partners, I have both an investing and an operating background. And we generally see that as being important as we really roll up our sleeves to source diligence, negotiate, be good partners across all our investments. It's clearly very applicable to our ownership investments like Anthos, Neurvati, Uniquity, for example, as well as our collaboration deals with major biopharma and medtech partners, and also for our post approval debt and commercial royalty deals. Specifically what I learned being a CEO or leading large pharma cross-functional teams, it's really about people. So it's hiring, firing, promoting people who are really knowledgeable in their field, they truly care about their business and patients, and they've got that sense of accountability and urgency to get important drugs to patients. And I love listening to the kind of culture the team wanted to create in these roles, building it with them, and then clearly communicating vision, strategy, plan, metrics that would make us successful. Building relationships with external partners and companies is also very important, as positive working relationships and reputation are good karma and open future doors. These are all attributes that we look for in our CEOs and management teams. And so far, we've had some excellent management teams. And we've been very fortunate to build companies with them.
Rahul Sood 17:57
Paris, you referenced, we are in a golden age of medicine in creating new therapies. How do you see the next five years shaping innovation, especially in reducing late stage attrition and scaling commercialization?
Paris Panayiotopoulos 18:10
Well, I don't have a crystal ball, Rahul, but over the next five years, I believe that biopharma innovation will likely be shaped by a convergence of digital transformation, such as, for example, AI powered models that will increasingly be used to predict clinical trial outcomes, identified by markers, optimize patient selection and reduce the likelihood of late-stage failures. Also it'll be shaped through precision medicine, through an increased understanding of genomics and proteomics, regulatory evolution, through accelerated regulatory paths and AI-generated reduction in review time. And then also there are likely to be strategic shifts in R&D and commercialization, again, through AI-based target screening, clinical trial design operations and commercial targeted communication. There's a great potential for the industry to reduce late-stage attrition and to scale commercialization more effectively as a result of these trends. And, my view is that companies that embrace these changes and foster collaboration across the whole ecosystem may truly be the best positioned to thrive in this dynamic landscape.
Rahul Sood 19:48
Paris, thank you for your insights today and coming to the podcast. It's been great to have you on. I think we're all out of time at this point, so that's it for this episode. Thanks everyone for tuning in to this episode of Pathfinders in Biopharma.
Paris Panayiotopoulos 20:01
Great to speak with you, Rahul. Thanks for inviting me.
Rahul Sood 20:04
Thank you, Paris.
Joe Coletti 20:10
Thanks to all of you for listening to Pathfinders in Biopharma, a podcast series from RBC Capital Markets. This episode was recorded on June 20th, 2025. Listen and subscribe to Pathfinders in Biopharma on Apple podcasts, Spotify or wherever you listen to your podcast. If you enjoyed the episode, please leave us a review and share the podcast with others. Thank you.
Disclaimer
This content is based on information available at the time it was recorded and is for informational purposes only. It is not an offer to buy or sell or a solicitation, and no recommendations are implied. It is outside the scope of this communication to consider whether it is suitable for you and your financial objectives.