Biotech deals fuel alternatives healthcare market

• Boston-based Bain Capital Life Sciences (BCLS) has closed its fourth buyout fund at $3bn, including a GP commitment of $500mn.

• The fund is almost twice the size of Bain Capital Life Sciences Fund III, which closed in 2021 for $1.7bn. Since its 2016 inception, BCLS has raised $6.7bn and invested in more than 70 companies globally.

• Bain Capital Life Sciences Fund IV will invest in ‘transformative medicines, medical devices, diagnostics, and life sciences tools that have the potential to improve the lives of patients with unmet medical needs,’ the firm said.

September 11, 2024 (Preqin News) – Bain Capital Life Sciences Fund IV is the joint-largest healthcare-focused private equity fund to close this year, alongside Norwest Venture Partners XVII.

Healthcare fundraising and deal flow were initially buoyed in 2020 and 2021 by the pandemic and low interest rates. Despite a cooling period, private equity and venture capital (VC) healthcare deals have seen a less dramatic decline in value than the broader market. Healthcare deal value fell from $492.2bn in 2021 to $368.1bn in 2023, a 25.2% drop, according to Preqin data. By contrast, the overall private equity and VC deal market saw a steeper decline of 45.4% from 2021 to 2023.

Within healthcare VC deals, nine in 10 exits are within biotech, with the sector now representing over 60% of healthcare VC AUM. ‘There continues to be ample opportunity for biotech as recent innovations and developments in research drive higher-quality treatments,’ writes Michael Patterson, Senior Associate, Research Insights, in Preqin’s Research Note, the tailwinds behind biotech VC.

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