Goldman Sachs is planning to make a splash in the life sciences sector, taking in $650 million for its first fund aimed at the drug development space.
The size of the West Street Life Sciences I fund, which overshot its original target, makes it one of the largest first-time private life sciences growth funds, Goldman Sachs Asset Management claimed in a Jan. 3 release. The $650 million in equity commitments was drawn from a “global, diverse group of institutional, strategic and high net worth investors."
The fund is managed by Goldman Sachs Asset Management’s Life Sciences Investing Group, whose strategy is focused on “growth-oriented private equity investments in life sciences, specifically targeting early to mid-stage therapeutic companies with multi-asset portfolios in addition to life sciences tools and diagnostics companies.”
Around $90 million of the fund has already been parceled out to five companies in the group’s portfolio, including bladder cancer-focused Moma Therapeutics, molecular glue developer Nested Therapeutics and neurological disease biotech Rapport Therapeutics.
“Goldman Sachs Asset Management has identified several themes of fundamental innovation as well as structural shifts that we believe will drive significant growth in the coming decades,” the firm said in the release. “These themes include precision medicine, genetic medicine, cell therapy, immunotherapy, synthetic biology, and artificial intelligence.”
Amit Sinha, head of the Life Sciences Investing Group, said the sector is entering a “golden era of innovation.”
“We believe the current environment provides an attractive opportunity for investing in the next generation of leading life sciences companies,” Sinha added. “Through our global platform, we seek to be a capital provider of choice and help our companies realize their full potential.”
Goldman Sachs' $650 million haul will offer some reassurance against a backdrop of declining fundraises for biopharma. An analysis by PitchBook in early December suggested that by the end of 2022, biopharmas were projected to have raised about $24 billion across about 840 transactions—the lowest tally in four years.
Despite the significant drop in venture capital funds, deals are still being done, though a shift in investment strategy has occurred, according to PitchBook. There have been fewer but more significant deals happening, indicating a more judicious approach that prioritizes larger and potentially more stable investments, the report said.