Blackstone Raises $1.6 Billion for Fund to Establish New Drugs

Blackstone Inc. raised $1.6 billion for a fund to establish new drugs and therapies, expanding its role in the life sciences industry.

The vehicle will invest in companies with products that have received regulatory approval for commercial use, said Nicholas Galakatos, head of Blackstone’s life-sciences arm. It will also invest in royalties that could be tied to drug sales. It’s the firm’s first-ever fund with this strategy.

With biotechnology stocks under pressure, the world’s largest alternative asset manager is betting it can establish a foothold during a period when fewer investors are willing to fund new drug plays.

“Many ...