Blackstone Buys Japan Drug Trial Firm, Adding to PE Health Deals #JapanFinance

(Bloomberg) — Blackstone Inc. is buying a company that helps drugmakers run clinical trials in Japan, adding to growing interest from private equity firms in the health needs of the nation’s aging population.

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The world’s largest alternative asset manager said it agreed to purchase 60% of Tokyo-based CMIC Co., a contract research organization, in a deal that values the company in the hundreds of millions of dollars.

Blackstone and peers like Bain Capital have been increasingly active in Japan’s life science sector amid a wider buyout boom in the country. Recent regulatory changes in Japan to ease “drug lag” — the delay of a medicine’s availability in certain countries due to the need to run local clinical trials — have made pharmaceutical deals more attractive.

“The Japanese clinical trial process is pretty inefficient, and it takes a very long time compared to other markets,” Atsuhiko Sakamoto, Blackstone’s head of Japan private equity, said in an interview. “They are now streamlining the process to make it faster to bring new drugs to Japan, so that’s something we can contribute to.”

Blackstone’s deal for CMIC is the second by a major global private equity firm in the past month in Japan’s pharmaceutical sector. In February, Bain Capital said it agreed to acquire Mitsubishi Tanabe Pharma Corp. in a transaction that valued the business at $3.3 billion.

Both Blackstone and Bain pointed to the business opportunity in helping bring new drugs to Japan faster as needs increase with the aging population. Blackstone has invested in several drugs in late clinical testing through its Life Sciences fund, and its ownership of CMIC could help bring the treatments to market in Japan quicker, Sakamoto said.

Japan’s drug lag was about 1.3 years in 2023, according to the Pharmaceuticals and Medical Devices Agency. As of March of that year, 143 new drugs approved in the US and Europe hadn’t been cleared for use in Japan, and more than half of those hadn’t even put in applications for approval, health ministry figures show.

Blackstone said it would seek to do more deals in pharmaceutical services in Japan to grow CMIC, and aims to exit through an initial public offering within five years. Last year, the firm took another Japanese pharmaceutical services company called I’rom private through a 55% ownership, but Sakamoto said it would keep the two businesses separate for now as there are few immediate synergies.

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