Private equity firm Bain Capital stands to make more than 10 times the $250 million it invested in Cerevel Therapeutics Holdings Inc (CERE.O) following the neurology-focused drug developer's $8.7 billion sale to AbbVie Inc (ABBV.N), according to regulatory filings.
Boston-based Bain committed $350 million in 2018 to carve Cambridge, Massachusetts-based Cerevel out of Pfizer Inc (PFE.N), but only $250 million of that was drawn, the filings show. The deal with AbbVie, announced on Tuesday, now values Bain's 36.5% stake in Cerevel at about $2.7 billion.
This more than tenfold return is significantly higher than the private equity industry's average return on invested capital in the healthcare sector of 2.9 times, according to investment advisor Cambridge Associates.
A Bain spokesperson declined to comment.
Bain's success reflects the high stakes of its bet on Cerevel's drug portfolio. It is developing medicines for Alzheimer's, Parkinson's, psychosis, epilepsy and panic disorder. Its experimental drug emraclidine is in mid-stage trials as a treatment for schizophrenia that will yield data the company hopes can be used to seek regulatory approval.
Bain and Pfizer, which retained a 15% stake in Cerevel, took the company public in 2020 through the merger with a special purpose acquisition vehicle. It was one of the few such deals to have proved successful, as most companies that went public through that route in the past three years now trade at a fraction of their deal value.
Bain, which has about $180 billion in assets under management, is one of the private equity industry's most prolific investors in the healthcare sector, completing more than 940 deals in the space since 1984.
