By: Agastya Jain, Ben Curtis, Jack Kennedy, and Jed Worthey
2/16/2025
Deal Overview:
Sponsor Selling: Blackstone Life Sciences (BXLS)
Target Company: Anthos Therapeutics, Inc.
Buyer: Novartis AG (NYSE: NVS)
Sector: Healthcare
Subsector: Biotechnology & Pharmaceuticals
Investment Structure: Acquisition by Novartis for up to $3.1BN ($925MM upfront and $2.15BN in earnout payments)
Announcement Date: 2/11/2025
Expected Close Date: H1 of 2025
Firm Overview:
Anthos Therapeutics (Target): Founded in 2019 by Blackstone Life Sciences and Novartis, Anthos Therapeutics is a clinical-stage biopharmaceutical company focused on the development of novel therapies for cardiometabolic diseases. The company holds exclusive global rights to “abelacimab”, a highly selective Factor XI inhibitor, aimed at preventing stroke, systemic embolism, and cancer-associated thrombosis. Anthos’ research has demonstrated superior safety and efficacy in reducing major bleeding risks compared to existing anticoagulants. The company is conducting multiple Phase 3 clinical trials, with results expected in the second half of 2026.
Blackstone Life Sciences (Investor): Blackstone Life Sciences is a private investment platform specializing in biotechnology and pharmaceuticals. With $12BN in AUM, the firm actively invests in drug development and medical technology innovation. Blackstone played a critical role in the growth of Anthos by securing abelacimab’s global rights, designing its clinical development strategy, and providing financial backing to advance its development pipeline.
Novartis (Acquirer): Novartis is a leading global pharmaceutical company with a strong presence in cardiovascular medicine. Given its expertise in the space, Novartis is well-positioned to further abelacimab’s clinical development and commercialization.
Sector & Deal-Relevant Trends:
Strong Growth in Cardiovascular Drug Market Driven by Factor XI Innovation: The global cardiovascular drug market, currently valued at ~$150BN, is projected to expand at a 4% CAGR from 2024 to 2033, driven by the rising prevalence of cardiovascular diseases (CVDs) such as hypertension, heart failure, and coronary artery disease. This growth is further accelerated by an aging population and increasingly specialized treatments. However, the anticoagulant market, a critical segment of cardiovascular drugs, is expected to grow at an even faster rate. From 2024 to 2032, the anticoagulant market is projected to grow at a 9.11% CAGR, more than doubling its TAM from $37.1BN in 2025 to $81.2BN by 2034.
This accelerated growth is primarily fueled by breakthrough innovations in Factor XI inhibitors, a next-generation class of blood thinners that effectively reduce stroke risk while minimizing bleeding complications, preserving the body’s natural clotting process. Given their potential superior safety profile compared to traditional anticoagulants, Factor XI inhibitors are reshaping the market landscape and driving increased M&A activity as pharmaceutical companies seek to capitalize on these emerging therapies. Major players such as Pfizer, Johnson & Johnson, and Bayer, each with multi-billion-dollar cardiovascular portfolios, now face competitive pressure as new entrants push for therapies with improved efficacy and safety, signaling a potential industry shift toward Factor XI innovation as the next standard in anticoagulation therapy.
Private Equity’s New Relationship Model with Biopharma: Private equity firms like Blackstone Life Sciences are playing an increasingly influential role in funding drug development, particularly for high-risk, high-reward therapeutics. However, this dynamic isn’t one-sided— large pharmaceutical companies are increasingly eager to offload their early-stage assets to private equity firms in exchange for substantial payouts, significantly mitigating their own risk. It’s sensible for biopharma companies to de-risk pipeline investments by shifting early-stage costs to PE-backed biotech ventures and instead focusing on M&A of late-stage assets with clearer pathways to commercialization. The traditional process entailed big pharma companies either developing assets in-house or acquiring them from biotech firms at any developmental phase. “Pipeline reintegration”, as in this transaction, represents an alternative approach: spinning out assets, allowing external investors to assume early-stage risk, and reacquiring them at a later stage if proven to be promising. The successful exit from Anthos validates PE’s newfound investment strategy of incubating and scaling biotech startups before selling them to established pharmaceutical giants.
Earnouts Allowing for Flexibly and Mutually Beneficial Deal Structures: Private equity firms have traditionally been risk-averse in the biotech sector, given the dominance of established players and the uncertainties of drug development. Additionally, recent M&A market volatility has made deal structuring more complex. However, the use of earnout clauses—deferred payments tied to specific performance milestones—has surged, with the percentage of deals featuring earnouts increasing from 20% in 2021 to 33% in 2023. This trend allows PE investors to structure deals that enhance the number of exit opportunities and drive higher return potential. From the biopharma perspective, earnouts make late-stage drug development more attractive, as they mitigate financial risk in the event that a target drug fails to reach commercialization. Within biotech financing, capital deployment is becoming increasingly aligned with performance-based metrics, ensuring that investments are made in assets with proven, demonstrated progress. In this transaction, over 67% of the deal was structured as an earnout, reinforcing the growing role of earnouts in risky, high-growth markets like biotech.
Projections, Opportunities, and Risks:
Strong Returns for BXLS Reinforce the Growing PE/Biopharma Relationship: In 2019, BXLS committed $250MM to establish a partnership with Novartis, leading to the creation of Anthos Therapeutics. Novartis spun out Anthos after advancing its drug to the verge of Phase 2 trials, while retaining a minority stake. This PE/Biopharma collaboration model is gaining traction, offering significant return potential but also carrying a higher risk profile than traditional PE buyouts due to the inherent volatility of early and mid-stage biotech investments. However, with this heightened risk comes the potential for outsized returns. With Novartis’ $925MM upfront payment for Anthos, BXLS secured a minimum 3.7x money-on-money return and an estimated 28% IRR over a 5.25-year investment period. If the full $3.1BN earnout is realized, BXLS stands to achieve a 12.4x money-on-money return, with an IRR potentially exceeding 61%, depending on the timeline of earnout payments.
On a broader scale, this model has the potential to reshape the private equity landscape. By diversifying into higher-risk, long-horizon assets (7-10 years vs. the traditional ~5 years), PE firms can expand their exposure to growth-fueled sectors such as specialty pharmaceuticals, which focus on niche, high-demand therapeutic areas. This strategy is evident in BXLS’s investment in cardiovascular drug development, a market driven by the fact that cardiovascular diseases remain the world’s leading cause of death, presenting a multi-billion dollar opportunity for investors. Additionally, BXLS constructs formidable teams to ensure an efficient drug development process, as seen by recruiting John Glasspoo (former leader of Novartis’ cardiovascular and metabolism franchise) as CEO of Anthos. For this model to continue to work, it is paramount for the PE firms to have a robust drug development team in place— which could come at an excessive cost for smaller firms.
Beyond that, the most transformative industry impact of this model is the new capital inflows into biopharmaceuticals. Historically, venture capital (VC) was the primary institutional funding source for these firms. Blackstone’s model is generated under the idea that venture-backed biotech firms face financial constraints in late-phase development, either because they outgrow VC funds or because they have more asset improvement related expenses than capital available. However, with PE firms now stepping in, the sector benefits from a deeper, more diversified capital pool. Increased PE participation may also signal a shift away from dilutive VC equity financing toward less dilutive investment terms, such as structured financing, milestone-based deals, and, though less probable within biotech, private credit arrangements. Ultimately, this deal serves as a proof of concept for private equity's role in biopharmaceuticals, demonstrating the potential rewards of high-risk investments while reinforcing the value of biopharma firms offloading non-core assets to focus on their core pipelines.
Novartis Strengthens its Cardiovascular Pipeline: Novartis’ acquisition of Anthos Therapeutics reinforces its strategy to strengthen its cardiovascular portfolio, particularly as Entresto ($7.8BN in revenue) faces generic erosion, with its first patents expiring in July 2025 and some generics already FDA-approved in May 2024. The centerpiece of this acquisition is abelacimab, a next-generation Factor XI anticoagulant designed to prevent strokes with reduced bleeding risks compared to current therapies. In a recent trial against Xarelto (a leading commercialized anticoagulant), abelacimab demonstrated a 67% reduction in major bleeding and an 89% reduction in gastrointestinal bleeding, positioning it as a strong candidate in the evolving anticoagulation market.
Factor XI inhibitors are gaining traction as the next frontier of blood thinning treatments, especially as legacy drugs like Xarelto and Eliquis approach generic expiration and show inferior efficacy to some Factor XI candidates. Even though Novartis decided to re-enter after seeing promising results, challenges remain, as evidenced by Bayer’s Factor XIa inhibitor trial, which reported twice as many negative cardiovascular events (heart attacks, strokes) compared to Eliquis in addition to BMS & J&J’s milvexian, which failed a phase 2 trial but still advanced into phase 3 studies in 2023. Despite these broader hurdles, abelacimab’s strong phase 1 and phase 2 results earned it Fast Track Designation from the FDA in July 2022 for thrombosis associated with cancer and in September 2022 for stroke and systemic embolism prevention in atrial fibrillation. The drug is now in phase 3 trials, with results expected in late 2026, meaning Novartis will lead the final stage of development and potentially, commercialization.
This strategy aligns with the PE/Biopharmaceutical partnership model, where pharmaceutical firms offload early-stage, high-risk assets (phase 1 & 2) but reenter at phase 3, especially when considering the likelihood of approval (LOA) jumps from ~6-7% in phase 1 to ~50-60% in phase 3. Also, by focusing on stroke and systemic embolism prevention in atrial fibrillation, abelacimab sidesteps direct competition from existing blood thinners and their generics, creating another multi-billion-dollar opportunity for Novartis upon (potential) FDA approval.
“Abelacimab has the potential to be an important treatment option for the millions of patients globally with atrial fibrillation at high risk of stroke, and we could not have more conviction in the potential of this asset.”
- Bill Meury, Chief Executive Officer, Anthos Therapeutics
We believe abelacimab has the potential to be a leader in the new class of Factor XI anticoagulants and are pleased to have Novartis as a committed partner to advance the development and commercialization of abelacimab as a potential treatment option for the millions of patients at risk of strokes. This transaction is an affirmation of Blackstone Life Sciences’ ownership investment strategy, where we seek to find innovative products and build companies around them to meet unmet patient needs.”
- Dr. Nicholas Galakatos, Global Head, Blackstone Life Sciences
The bottom line...
This transaction highlights a major push by private equity into biotech, with PE firms backing early-stage biotech companies and assuming the high level of risk involved. Meanwhile,
Novartis’s role in the deal exemplifies the process of “pipeline reintegration”, where large pharma companies will offload an early-stage biotech asset and reenter into the development at a later stage. With the growth in innovation within the speciality pharmaceuticals sectors, as seen by Factor XI inhibitors in this deal, there is conviction behind this partnership structure becoming increasingly popular.
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