Blackstone Inc. is investing as much as $250 million in U.K. biotechnology company Autolus Therapeutics PLC to fund the final stages of development of a new therapy to treat a serious form of leukemia, the companies said.

Of the total investment, as much as $150 million will support the development and commercialization of obecabtagene autoleucel, a cell therapy that targets a condition called acute lymphoblastic leukemia. London-based Autolus will receive $50 million of that upfront, with the rest to be paid as the company...

Blackstone Inc. is investing as much as $250 million in U.K. biotechnology company Autolus Therapeutics PLC to fund the final stages of development of a new therapy to treat a serious form of leukemia, the companies said.

Of the total investment, as much as $150 million will support the development and commercialization of obecabtagene autoleucel, a cell therapy that targets a condition called acute lymphoblastic leukemia. London-based Autolus will receive $50 million of that upfront, with the rest to be paid as the company achieves certain milestones. In return, Blackstone’s life-sciences unit will receive a portion of the therapy’s royalties.

Blackstone will also buy $100 million worth of Autolus’s American depositary shares, taking a significant stake in a company whose market capitalization stood at $404 million as of Friday’s close after a fairly steady decline since its 2018 initial public offering. The private-equity company will get a seat on Autolus’s board.

The investment is a bet on Autolus’s model of cell therapy, which could be applied to other forms of cancer. It is also indicative of a broader bullishness on the part of the unit and Blackstone on investing in the U.K., where it has found lower valuations and less competition.

“There’s simply a lot less capital available in Europe and the U.K., specifically for life sciences, than in the U.S.,” said Nicholas Galakatos, global head of Blackstone Life Sciences.

Blackstone believes its investment in Autolus is the largest by a single investor in the U.K. biotech sector, he said. The firm’s real-estate business has also invested significantly in lab space in the Cambridge area through its BioMed Realty business.

Blackstone Life Sciences, which the firm launched in 2018, invests in pharmaceuticals, biotech and medical devices that need additional capital to get to market. The unit exemplifies Blackstone’s push into faster-growing areas of the economy as it pursues its goal of reaching $1 trillion in assets by 2026.

Autolus Chief Executive Christian Itin said Blackstone’s investment will provide the company with crucial funding to get the leukemia therapy across the finish line and expand into international markets.

On average, patients diagnosed with acute lymphoblastic leukemia only live a year, but 85% of those in the company’s trials have no detectable sign of the disease after receiving the treatment, and half remain in remission after two years, he said. The therapy is also less toxic than other treatments, allowing patients to take it for longer periods.

Mr. Itin said Autolus is working with the U.K.’s National Health Service, which has a wealth of patient data, to conduct its trials.

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com