Wall Street's Biggest Names Just Bet $1 Billion on One Biotech
Sixth Street and KKR just injected $1 billion of preferred equity into BridgeBio Pharma, one of the largest such deals ever for a public biotech. The unusual structure reveals a new financing playbook for late-stage drug companies caught between clinical success and commercial scale.
When two of the largest alternative asset managers on the planet write a single check worth $1 billion to a biotech company, that's not a routine financing. That's a statement.
Sixth Street Partners and HealthCare Royalty (a business of KKR) just pumped up to $1 billion of preferred equity into BridgeBio Pharma, the genetics-focused drugmaker behind the heart drug Attruby. Sixth Street led the deal with $800 million. HealthCare Royalty kicked in another $133.9 million at close, with capacity for more under the agreement's ceiling.
The deal is being called one of the largest preferred equity investments ever made in a public biotech. And its structure tells a very specific story about where the smart money thinks biotech is headed.
Not Debt, Not Stock, Something In Between
To understand why this deal matters, you need to understand what preferred equity actually is.
Think of a company's capital structure like a line at a buffet. Debt holders eat first. Common stockholders (the regular shares you buy on Robinhood) eat last. Preferred equity holders? They cut in line ahead of common shareholders but stand behind the debt holders. They get served before you do, but they're not first through the door.
BridgeBio's new security is technically called Series A Cumulative Convertible Participating Preferred Stock. That's a mouthful. In plain English, it means:
Cumulative: If BridgeBio skips a dividend payment, it doesn't disappear. It accrues and stacks up.
Convertible: Under certain conditions, the preferred shares can turn into regular common stock.
Participating: The holders may share in upside beyond their base return, though exact terms haven't been fully disclosed yet.
The preferred pays a 7% annual dividend, and BridgeBio can choose to pay that in cash or in kind (PIK), meaning the company can conserve its cash by issuing more preferred shares instead of writing a check. It's the corporate equivalent of "I'll pay you back later, but with interest."
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Perhaps most importantly, this is described as "permanent equity." There's no maturity date. No expiration. Sixth Street and KKR can't force BridgeBio to buy the shares back. The company holds the redemption card, not the investors.
For a biotech still running at a loss, that's a huge deal. No ticking clock. No debt wall approaching.
The Conversion Price Tells You Everything
Here's where the deal gets clever.
The preferred shares can convert into common stock at a price of $137.79 per share. BridgeBio's stock was trading at around $74.52 on the announcement date. That conversion price sits at more than a 100% premium to the company's 30-day average trading price at the time of signing.
In other words, BridgeBio's stock would need to nearly double before these investors could convert and own common shares. And after year five, the conversion price actually steps up to $153.10, making conversion even harder.
Why would Sixth Street and KKR agree to that? Because they're not playing the short game. They're betting that BridgeBio's drug portfolio will drive the stock well past those levels over the next several years. And in the meantime, they collect a 7% coupon on a billion dollars of capital. That's a $70 million annual return before the stock moves a penny.
It's a bet that says: "We believe this company's future is worth far more than today's price, and we're happy to get paid while we wait."
The Drug That's Paying for Dinner
So what exactly are Sixth Street and KKR betting on?
The anchor of BridgeBio's portfolio is acoramidis, sold as Attruby in the U.S. and BEYONTTRA in Europe, Japan, and the UK. It treats a condition called transthyretin amyloid cardiomyopathy (ATTR-CM), a disease where misfolded proteins build up in the heart and cause it to stiffen and fail.
Attruby works by stabilizing those troublesome proteins before they can clump together and cause damage. It's marketed as the first and only "near-complete" TTR stabilizer, meaning it locks down 90% or more of the problematic protein. Long-term data through 54 months show significant reductions in both cardiovascular death and overall mortality.
The commercial traction has been strong. In 2025, BridgeBio reported $502.1 million in total revenue, with net product revenue of $362.4 million largely driven by Attruby. The drug delivered 35% quarter-over-quarter revenue growth in Q4 2025 alone.
By February 2026, doctors had written 7,804 unique prescriptions across 1,856 unique prescribers.
That's the kind of revenue trajectory that makes billion-dollar bets feel rational.
Three More Launches on Deck
Attruby isn't the only reason the money showed up. BridgeBio has three additional U.S. launches expected over the next 12 months:
BBP-418 targets limb-girdle muscular dystrophy type 2I, a rare genetic muscle-wasting disease. Encaleret treats autosomal dominant hypocalcemia type 1, a rare calcium disorder, with a Phase 3 study in chronic hypoparathyroidism planned for 2026. And low-dose infigratinib targets achondroplasia, the most common form of dwarfism, caused by a mutation in the FGFR3 gene.
Further back in the pipeline, BridgeBio is developing a monoclonal antibody designed to actually clear existing amyloid deposits from the heart, not just prevent new ones. That program is expected to enter clinical trials in 2027–2028 and could complement Attruby in a one-two punch against ATTR-CM.
Launching one drug is expensive. Launching four simultaneously? That's a capital furnace. Which is exactly why a billion dollars of permanent, flexible equity makes strategic sense.
A New Playbook for Biotech Financing
Step back from BridgeBio for a moment and look at the broader pattern. This deal isn't happening in isolation.
Sixth Street also led a $500 million strategic financing with Beam Therapeutics in 2026. Across the industry, royalty financings and structured equity deals have gone from "nice to have" to essential funding sources. High interest rates and volatile public markets have made traditional options (like selling common stock or raising straight debt) unappealing for many biotechs.
Private equity and alternative asset managers are stepping in with customized capital solutions: preferred equity with built-in yield, royalty-backed financing, convertible structures with downside protection. These instruments sit in a gray zone between debt and equity, offering investors protection while giving companies breathing room.
BridgeBio itself illustrates this layered approach. Before the Sixth Street/KKR deal, the company had already arranged up to $1.25 billion in royalty and credit facilities with Blue Owl and CPP Investments. That deal included a 5% royalty on Attruby's worldwide net sales, capped at 1.9x the invested capital. Add the new preferred equity on top, and BridgeBio has built a capital fortress without flooding the market with dilutive common shares.
For BridgeBio's existing shareholders, the math is straightforward: the conversion price is so far above the current stock price that immediate dilution is minimal. The cost is that 7% coupon, which could total $70 million per year if paid in cash. But for a company projecting multi-billion-dollar revenue potential, that's a manageable toll for a billion dollars of permanent capital.
What This Signals for the Industry
BridgeBio still trades at a negative P/E ratio. Its return on assets sits around negative 64%. Interest coverage is negative too, meaning operating income doesn't currently cover existing interest expenses. On paper, this is not a profitable company.
But profitability isn't really the point right now. The point is trajectory. Attruby is scaling fast. Three more drugs are nearing launch. And two of the sharpest capital allocators on Wall Street just said, in the loudest way possible, that they believe in where this is going.
The structure of the deal matters as much as its size. By choosing preferred equity over debt, BridgeBio avoids adding to its repayment obligations. By setting conversion prices at a massive premium, it protects current shareholders from near-term dilution. By making the capital permanent with no investor redemption rights, it removes the refinancing risk that has torpedoed other biotechs at critical moments.
This isn't just a financing; it's a template. As more late-stage biotechs face the expensive gap between "drug works" and "drug makes money," expect to see this kind of structure become standard. The days when biotechs had two options (sell stock or take on debt) are fading. The new playbook involves bespoke, hybrid instruments designed by firms that used to focus on leveraged buyouts and real estate.
Biotech's financing toolkit just got a major upgrade. And it took a billion-dollar bet on genetics to prove it.
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