By Jennifer Van Brunt

Over the last 30 years or so, the biotech sector has gained quite a reputation for itself – and on many levels. For instance, it’s renowned for its volatility: Investors must have strong stomachs if they intend to ride these stocks to profitability. For another, it’s famous for gobbling up piles of cash with nothing to show for it – a kind of life sciences-based “money pit.” Then why do investors put any money into these companies in the first place? Well, the smart ones know that these firms will determine the future of medicine, and they’d like to be there as it happens. And they’ll create some very interesting financing options to make sure that every promising company in need of cash will find it.

Once upon a time, when the biotechnology industry was young, companies in this sector were broadly defined as money-losing outfits that had an insatiable thirst for cash. Investors, used to more traditional sorts of businesses, found it difficult to understand why these firms required such vast amounts of money and time to produce a marketable drug. As a result, even biotech companies that succeeded in raising money early on found themselves in a precarious position, and many teetered on the brink of bankruptcy.

But the ensuing implosion never occurred. Instead, this stressful situation brought out some of the best minds in the business – and before you knew it, these financial wizards had devised a number of clever strategies for raising money. We had SPARCS (special purpose accelerated research corporations) and SWORDS (stock and warrant off-balance-sheet R&D corporations) and RDLPs (R&D limited partnerships). All of these financing vehicles were successful, too. Yet, each had its limitations and investors as well as biotech sponsors abandoned them as other sources of less risky and less expensive capital came into play.

Today, the biotech industry has proved itself to investors over and over again. A smart investment can yield fantastic returns, but requires a great deal of patience – and lots of luck. A negative clinical trial result can strip a stock of all value in the blink of an eye, while a positive one can lift the entire group. The sector is notoriously volatile, and many can’t stomach the ride. So even after all this time, the money men who wield their power on Wall Street still carry on a love/hate affair with biotech – and when they turn their backs, the sector’s magicians go to work, creating new ways for companies to raise money.

We’re actually in the midst of one of those times right now, although it may not be obvious. After all, biotech and specialty pharma companies raised more than $26.5 billion in 2006, 40 percent more than they did in 2005 and the sector’s second-best year ever. But that number is actually misleading, because all this new-found wealth was channeled into a mere handful of companies. For the rest, times are tough. And we fear that it may always be so. (For details, see the Signals article, “The Rich Get Richer…”)

Under that scenario, companies and financiers will always be searching for new ways to raise cash – ideally, without dilution – to augment any payments that might be coming from corporate collaborators, institutional investors and private equity firms, among others.

Indeed, alternate financings are a hot topic these days, and every major conference so far this year has included at least one panel on the subject. There’s a wide array of choices, too – everything from venture debt to royalty financing, from CRO-linked funding to reverse mergers. As we’ll see, some of these alternate structures are new to the biotech space, while others are sophisticated versions of earlier arrangements.

Acronyms of the 80's

Biotech giant Genentech Inc. is widely credited with creating the first SPE (special purpose entity) in the sector. Called Genentech Clinical Partners, this financing vehicle was actually an RDLP (R&D limited partnership) created specifically to raise money for the clinical development of recombinant human growth hormone and gamma interferon. And in 1982, it did just that, garnering $55.6 million through a private placement. That was enough to kick-start a long series of similar deals: Reportedly, 39 SPEs were created in the U.S. between 1982 and 1997 (which includes three more put together by Genentech).

At the time, virtually every biotech company wanted to be a FIPCO (fully integrated pharmaceutical company) when it grew up – and savvy corporate executives realized that they would need enough money to pay for and manage their own clinical trials if they were ever to achieve that status. As exemplified by the pharmaceutical giants, success meant making and selling one’s own products – not farming them out to more experienced outfits. Once you consider the companies that used RDLPs to fund clinical work on the industry’s first big products – Amgen, Centocor, Biogen,
Cetus, Genzyme and Genentech – it becomes obvious that the strategy worked.

This sort of business arrangement might have been new to the biotech field, but it had already been used successfully in other industries – including oil, semiconductors and real estate. The trick was embodied in the tax laws of the ‘70s, under which an investor in such a partnership could receive the tax deductions associated with money spent on R&D and then apply those deductions to his or her personal taxes. (The Tax Reform Law of 1986 eliminated this tax shelter, and with it the RDLP.)

When RDLPs fell out of favor, other sorts of SPEs popped up. Generally speaking, these were set up as separate businesses, which then owned particular assets of the sponsoring biotech firm (intellectual property, for instance, or preclinical drug candidates) and assumed the risks associated with financing. The SPE issued shares, which were backed by the project’s assets. Because these SPEs were not full-fledged corporations, they usually lacked scientific staff and laboratories. To solve this problem, sponsoring biotech companies contracted R&D services to the SPEs, which paid for them with the money they raised through the sale of the SPE’s securities.

Most SPEs also included provisions for product buy-back, under which the sponsoring company has the option to reacquire the SPE’s assets in the future. SPEs also incorporated safeguards for investors, naturally, which varied in the particulars but generally allowed investors to put money into an interesting project while distancing them from any risks linked to the sponsoring biotech company per se.

Enron's legacy

Unfortunately, SPEs got a nasty reputation in 2001 when Enron Corp.’s maze of off-balance sheet vehicles that kept the corporation’s multi-billion dollar debt from showing up on its balance sheet was exposed. When the facts were uncovered, the company fell apart. More importantly, the debacle shook investors’ confidence in big business per se, and cast SPEs in a sinister light. No one wanted to go near them – and until corporations became more transparent in their financial dealings, no one did. Biotechs suffered too, for the industry had used various sorts of SPEs quite successfully, including the 55 joint ventures that Elan Corp. plc set up with biotech firms. The structure of these JVs, as well as the way in which Elan accounted for them, came under increased scrutiny by investors as well as the SEC. (For details, see the Signals article, “Deconstructing Elan.”) By early 2005, both the shareholder class action lawsuit and the SEC’s investigation had been settled,
with Elan neither admitting nor denying the allegations.

Meanwhile, new accounting rules from the Financial Accounting Standards Board (FASB) essentially eliminated off-balance sheet financing mechanisms (including RDLPs, SPARCS and SWORDS). But companies still needed to devise creative ways to raise money, especially for specific projects – and so they did.

As a result, today’s firms have a wide variety of financing vehicles from which to choose.

Music to my ears

One of those is collaborative development financing, an increasingly popular financing model offered by managing director Mark Kessel and his colleagues at private equity firm Symphony Capital LLC. These deals set up an independent company to fund and develop particular clinical programs for a biotech firm. The third party in this arrangement is a CRO – RRD International LLC -- which brings its clinical development expertise and extensive network of specialists to the table.

This structure allows the risks to be transferred to the investors, while simultaneously allowing the firm to retain control of the drug or drugs that may result from the endeavor. The expenses and risks associated with the clinical development of these drug candidates are transferred to Symphony during the collaboration. Symphony also gets a license to the intellectual property related to the programs covered by the agreement.

The biotech only spends money when and if it decides to buy back the product or products at a pre-negotiated price. Thus, this structure preserves the economic upside of chosen products and minimizes dilution of the biotech’s shares. As well, it allows the biotech company to focus its internal resources on its lead programs while simultaneously providing support for its earlier stage products. And in the interests of transparency, the biotech company consolidates the operating results for the new company into its financial statements.

“We set up a development company and decide how much money it will take to get to a specific clinical point,” Kessel explained. “The biotech can capture substantial value while off-loading 100 percent of the risk.” Importantly, the structure is flexible: Setting up a development company with Symphony Capital does not preclude any other arrangements the biotech wishes to make. For instance, it can be done either before or after the biotech has signed a big pharma deal on the same compound or compounds.

An example of a development symphony company

“I invented this form of financing back in the late ‘70s and early ‘80s,” Kessel said. He was referring to the RDLPs, which were “used by the leading biotech companies,” he added. “The RDLPs were primarily investments for high net worth individuals, who got tax write-offs.” Not surprisingly, when Congress amended the tax laws, RDLPs fell out of favor. Kessel also devised the structure for SWORDS and SPARCS (which are actually the same thing) to attract institutional investors, he continued. “These started as public offerings that were listed on AMEX, which enabled institutions to invest.” The sponsoring biotech firm put its own employees into the new company and determined how to spend the money. “This was purely a financing vehicle,” Kessel said. “There was no value
added.”

Today, however, Symphony’s collaborative development financing vehicle is definitely structured to create added value for the biotech company. “We bring capital and expertise to the biotech,” he said. “The development risk is transferred to us. There really is no downside for the biotech,” according to Kessel. But, since Symphony is taking the risk, “we need to be very selective in the companies and the compounds we pick,” he added. Symphony gets equity (in the form of warrants) in the biotech company, which gives it some downside protection, but it really only benefits “if they buy us out,” he said. The purchase price for each program covered by this agreement is payable in cash or cash plus shares of the biotech firm and is based on a compounded annual rate of return which varies from deal to deal.

Too good to be true

If the Symphony financing model is really as perfect as it appears to be, then why don’t all clinical-stage biotech companies give it a try? According to Frank Karbe, EVP and CFO at Exelixis Inc., a qualifying company must meet at least one of the following criteria: well defined projects and a good understanding of budget requirements; risk diversification either through inclusion of several programs, one program with several trials, or both; prospect of significant progress during the life of the vehicle; and unencumbered programs.

Interestingly, the three programs that Exelixis brought to Symphony Evolution, the company it formed with Symphony Capital in June 2005, are all covered in the biotech’s collaboration with GlaxoSmithKline plc (GSK).

However, the pharma still has the option to pick for further development any or all of these compounds (XL647, XL999 and XL784). If it exercises this option, Exelixis will get a 25 percent larger milestone payment than outlined in its GSK deal.

Speaking on a panel at BIO 2007, Karbe said “If GSK selects one of these three compounds, we are obligated to hand it over, but first we have to buy back the IP from Symphony Evolution.” Coming up with the cash is not a problem, though, because the money Exelixis gets when GSK exercises its option can be turned around to buy out Symphony Evolution.

Symphony capital deals

The first biotech company to try Symphony Capital’s approach was Guilford Pharmaceuticals Inc., which signed a $40 million deal in June 2004 that set up a new company to cover the clinical development of GPI 1485, a small molecule neuroimmunophilin ligand that was in Phase II clinical trials for Parkinson’s disease and post-prostatectomy erectile dysfunction at the time. By October 2005, however, MGI Pharma Inc. had acquired Guilford – and with it, the rights and obligations of Symphony Neuro Development Co. (SNDC). However, MGI was informed during the first half of 2006 that the drug candidate failed to meet its primary endpoint in both indications. Not surprisingly, MGI terminated its option to buy back SNDC during the same period, and by February 2007 it had assigned all of its rights to a third party.

One of the most recent Symphony Capital deals involved Alexza Pharmaceuticals Inc. In December 2006, the parties formed Symphony Allegro Inc., which received $50 million to fund the development of AZ-002 and AZ-004, two product candidates that were in Phase IIa trials for treating panic attacks associated with panic disorder and acute agitation in patients with schizophrenia, respectively. Interestingly, the Symphony Capital alliance was Alexza’s very first collaboration – and it’s still the only one. “It was fairly priced and the financing [under which Alexza owes no money if the trials turn out to be unsuccessful] made it interesting,” explained August Moretti, Alexza’s SVP and CFO. “All the risk is with Symphony Allegro.”

The two drugs that are covered “are very important to us,” he continued. “We want to market these drugs by ourselves in the U.S.” This will allow the company to build a specialty sales force in psychiatry, he said. “We absolutely want these drugs back. Putting them in the collaboration gives us the greatest coincidence of objectives.”

A bird in the hand

One great thing about the Symphony Capital financing vehicles is the fact that they are non-dilutive: The biotech company gets money to advance its product pipeline without diluting the equity interest of its shareholders through the sale of stock.

There’s another type of non-dilutive financing that’s become quite popular in the biotech arena – and that involves the sale of part or all of product-specific revenues or royalties. In essence, this type of financing allows firms to exchange uncertain future product royalties (or revenues) for immediate cash. But as we’ll see, it also works well for those academic institutions that are getting royalties on sales of a product that originated in their labs.

Xoma Ltd. was probably the first biotech to try this approach to fund-raising: In late 1997 it raised $17 million by selling its rights to future royalties on sales of Rituxan to Pharmaceutical Partners LLC. (Xoma had licensed the exclusive rights to its anti-CD20 antibody patents to Genentech Inc. in 1996; Genentech then sublicensed those rights to Idec Pharmaceuticals Corp.)

By now, royalty-based transactions are fairly common – and they should become even more abundant as the list of marketable products grows. As well, companies may be able to strike a deal on late-clinical stage therapies, providing them with even more cash to fund operations.

One of the most active investors in this field is Paul Capital Healthcare (formerly Paul Royalty Fund), which was set up in 1999 and now has more than $1.4 billion in capital under management. Paul Capital not only invests in revenues or royalty streams issuing from companies, though: It also helps academic institutions, universities and even inventors to monetize the royalties due them on their intellectual property.

About 90 percent of Paul Capital’s transactions concern drugs that are already on the market, but it will consider unapproved products as well. There are criteria, though: According to Paul Capital Healthcare partner Walter Flamenbaum, it will do deals on new formulations of drugs that are known chemical entities; products that are already approved in one country or area of the world and not in others; and therapies that are approved for one indication but are now being tested in a separate disease setting.

“Paul Capital takes a commercial risk,” Flamenbaum explained. “We don’t like to take development or regulatory risks.”

Selected investments by Paul Capital Healthcare

Paul Capital prides itself on the inventive and extremely flexible nature of its transactions, which vary according to the needs of individual clients. For example, in March 2007 Paul Capital restructured both of its investments in SkyePharma plc to help the British firm divest its injectables business. The deal also transformed the business unit into a private company – Pacira Pharmaceuticals Inc. – with a portfolio of marketed products, a clinical-stage candidate and a sustained-release drug delivery technology.

Paul Capital’s investments date back to December 2000, when it provided $30 million to SkyePharma between 2000 and 2002 in return for part of the future royalty and revenue streams for four products, including DepoDur. SkyePharma used the $30 million to fund the clinical development of DepoDur, a morphine-based drug that was approved in May 2004 for treating pain following major surgery. Under this agreement, Paul Capital was set to receive 15 percent of the annual royalties up to a pre-determined limit for the four products from January 2003 through December 2014.

In March 2002, the two parties signed another $30 million agreement, which covered nine more products in SkyePharma’s pipeline. “We put together a bundle of products, a mix of approved and unapproved ones,” Flamenbaum said. The agreement also funded SkyePharma’s acquisition of RTP Pharma. But in March 2007, Paul Capital converted its royalty participation in these products into a $92.5 million secured note, with additional payments linked to future sales of DepoDur – one of the products divested by SkyePharma.

Treated like royalty

Other biotech firms that have benefited from Paul Capital’s royalty-based transactions include (but are not limited to) Acorda Therapeutics Inc., AVANT Immunotherapeutics Inc., Dyax Corp., Guilford Pharmaceuticals and Oscient Pharmaceuticals Corp.

Through its December 2005 agreement with then-private Acorda, Paul Capital paid the firm $15 million in exchange for a portion of future royalties (through 2015) on FDA-approved Zanaflex (capsules and tablets), which is used to manage the spasticity associated with conditions like spinal cord injury and multiple sclerosis. Acorda also secured an option to receive two $5 million payments on sales milestones in 2005 and 2006. This deal was quite a coup for Acorda, which bought the rights to Zanaflex from Elan in July 2004.

In November 2006, the parties amended their agreement to revise the triggers such that Acorda could get up to $10 million in additional funding, which it intended to use to expand its Zanaflex Capsules sales force. Paul Capital gets 15 percent of net revenues up to $30 million per year; six percent of revenues on sales between $30 million and $60 million, and one percent on annual revenues greater than $60 million.

The perfect blend

Paul Capital’s agreement with Oscient Pharmaceuticals demonstrates yet another financing twist: In this July 2006 deal, Paul Capital provided $70 million in blended acquisition financing that allowed Oscient to acquire U.S.rights to the cardiovascular drug Antara from Reliant Pharmaceuticals Inc. Oscient paid Reliant $78 million for these rights and also bought about $4 million in existing inventory. $70 million of that came from Paul Capital’scontribution, which consisted of $40 million in revenue interest for royalties on both Antara and Oscient’s antibiotic Factive; $20 million in debt due in 2010; and a $10 million equity investment (which included warrants).

To secure its investment, Paul Capital also obtained all rights to Antara’s intellectual property (issued and pending). Paul Capital’s royalty rates on net sales of both products start each fiscal year in the high single digits and decline over the course of the year based on specified sales thresholds.

Why did Oscient choose Antara? According to Steven Rauscher, the firm’s president and CEO, it was looking to acquire a product with significant sales that could be promoted to the same physician and patient base it already serves. Antara (fenofibrate), which is approved for the adjunct treatment of high blood cholesterol and high triglycerides, addresses a growing market for drugs to combat serious cardiovascular events triggered by diabetes and hypertension.

“Antara was a good fit,” Rauscher explained, but its sales – $35 million over 12 months -- were bigger than what the company was looking for. And the $82 million purchase price “exceeded our market cap, so it was a financing challenge.” The challenge wasn’t too big for Paul Capital, though: “We started talking to Paul Capital about a year before the [Antara] transaction,” he said. “They were interested in potentially doing a deal with us and they could be flexible as to how we structured the financing.” Paul Capital also worked “very fast on what was a relatively complex transaction,” Rauscher added, wrapping things up in about six weeks.

And, importantly, this transaction “transformed the financial profile of Oscient,” he said. It even helped the company with its April 2007 financing, which involved the exchange of existing debt to increase the conversion price of its senior notes plus the sale of $60 million in new notes. Rauscher predicted that the firm’s revenues in 2007 will be 80 percent higher than they were in 2006 – with two-thirds of that coming from sales of Antara.

This blended acquisition financing heralds a new era for many biotech firms. When once they had to raise money before they could go shopping for products (and not every company was even able to get the cash), now they can it as they go. “Now we can finance around specific opportunities,” Rauscher concluded.

The more the merrier

Paul Capital isn’t the only firm to offer revenue- and royalty-based transactions: New York-based Royalty Pharma and Toronto-based Drug Royalty Corp. have each been at it for a decade or so. These transactions have gained such a hold in the biotech arena that the Cowen Group formed a new initiative – Cowen Healthcare Royalty Partners (CHRP) – in January 2007 to take advantage of the situation. To make it work, Cowen lured three specialists from Paul Capital Partners who had already worked as a team in the royalty investment space (Gregory Brown, Todd Davis and Clarke Futch). CHRP is currently raising interim capital but will really get going in October, when Brown
joins the group.

Royalty Pharma got its start in 1996, but through predecessor entities it had already purchased royalties in Amgen’s white blood cell booster Neupogen, which garnered its first FDA approval (for chemotherapy-induced neutropenia) in February 1991. Now, Royalty Pharma also owns a royalty interest in Amgen’s Neulasta (a long-acting form of Neupogen), as well as an impressive list of other biotech best-sellers. These include Abbott Laboratories’ Humira, Centocor’s Remicade, Genentech’s Rituxan, Gilead Sciences Inc.’s Emtriva, Truvada and Atripla, and Celgene Corp.’s Thalomid.

In most cases, Royalty Pharma deals directly with the institution or university that holds the drug’s underlying intellectual property. Some of these deals were huge, and sponsoring institutions received massive injections ofcash while still retaining a portion of future royalty interests on these products. In others, the institutions relinquished their claims to all future royalties.

Most recently, Royalty Pharma bought a portion of New York University’s worldwide royalty interest in the anti-inflammatory therapy Remicade, which received its first FDA approval (for treating Crohn’s disease) in August 1998. NYU struck it rich in this May 2007 deal, garnering $650 million in cash up front plus additional future payments based on the product’s sales. NYU retained the portion of the royalty interest that is payable to the scientists who developed the monoclonal antibody that forms the basis for Remicade.

Emory University also landed a huge sum of money in a transaction with Royalty Pharma. In this case, Royalty Pharma teamed up with Gilead Sciences to forge an agreement with Emory on Gilead’s marketed AIDS drug Emtriva. In July 2005 (two years after Emtriva’s US approval) the companies paid Emory $525 million in cash for full royalties on Emtriva’s worldwide sales.

Selected transactions by drug royalty

Canadian company Drug Royalty, with more than $1 billion under management, has also tapped into some important biotech therapies. Interestingly, it also gets a cut of Neupogen’s worldwide sales, for which it paid Amgen $25 million in June 1998. Drug Royalty acquired additional (undisclosed) royalty interests on Neulasta in March 2000.

As well, Drug Royalty grabbed an interest in Remicade, years before Royalty Pharma signed up. In April 2001, Drug Royalty paid $7 million for a royalty interest over the product’s patent life (about 13 years at the time).

The firm’s largest deal, which is also its latest, involves royalties on sales of Enbrel, a fusion protein that targets tumor necrosis factor and is used to treat rheumatoid arthritis, psoriasis and other related diseases. As we all know, Enbrel was developed by Immunex Corp., which Amgen acquired in July 2002. Today it’s sold by Amgen and Wyeth in North America and Wyeth elsewhere. But the science underlying this blockbuster therapy actually originated at Massachusetts General Hospital (MGH).

At one time, Amgen tried to lower its costs by disputing the amount of money the hospital received in royalties, but in June 2006 the biotech company resolved the issue by paying $186 million to MGH to eliminate the hospital’s North American royalties (although it will continue to get royalties on ex-North American sales). Those transactions cleared the way for Drug Royalty, which spent $300 million in May 2007 for royalty payments on sales of Enbrel outside North America.

All together, Drug Royalty owns 14 royalty streams and revenue interests on marketed pharmaceuticals. But it’s also done a technology deal: In October 2006, the company acquired royalties from Nanogen Inc. for its minor groove binder technology, which is licensed to Applied Biosystems for use in its TaqMan (PCR) products. Drug Royalty paid $20 million upfront for these rights and will get royalties up to a pre-specified threshold through December 2011.

Although Drug Royalty focuses on pure royalty transactions, it can also “do debt or equity as part of a royalty deal if it’s needed,” explained Paul Kirkconnell, the company’s managing director. It is also poised to launch a synthetic royalty fund for use with companies that already have product revenues, he added. “We give them a form of debt in exchange for a percentage of the top line for a particular product.” In essence, Drug Royalty is “contractually creating a royalty,” which it then buys.

Extending the runway

Debt is actually another great way to generate cash, but historically only large, well financed biotech companies have been able to raise hundreds of millions of dollars from the sale of convertible debentures. Smaller firms, if they used converts at all, could only sell those instruments that had a variable (rather than fixed) conversion price. Because the investors benefited when the company’s stock price went down (and down again), this particular type of financing earned a reputation as a toxic or death spiral convert. And, of course, privately held firms – if they wished to raise cash through a debt financing – had to turn to traditional lenders like Comerica Bank to get
their money.

These days, venture-backed private firms (as well as selected small-cap public companies) can turn to Hercules Technology Growth Capital Inc., which provides them with $10 million to $20 million in cash through debt financings. Debt has a number of advantages – including the facts that it is non-dilutive and cheaper than an equity transaction. On the other hand, the debt has to be paid back, and if the biotech company experiences a materially adverse change, the lender can call the loan.

Over the last 18 months, Hercules has provided $101 million total in venture debt to eight private biotech companies. It also participated with other investors in a $44 million Series E round for QuatRx Pharmaceuticals Co. in May 2007. Indeed, venture debt and equity financings can and do exist side-by-side. In some cases, the debt can help a fledgling firm to achieve its next milestone event, the sort that will attractmore equity investors.

According to Kathy Conte, Hercules’ managing director of life sciences, venture debt is not a new type of financing. “I have been lending money to venture-backed life sciences companies for 15 years.” However, the types of companies involved have changed, she explained. At one time, Hercules focused on deals with healthcare providers and physician practices, for instance, but the ascendance of the biotech sector attracted venture capital, and “the debt followed that,” she said.

The typical arrangement, Conte said, involves a three-year term loan but is structured to match the biotech firm’s clinical development timeline. “The source of repayment is the next round of equity, she explained, although Hercules “does not demand repayment from that equity.”

The loan from Hercules “will amortize. Each month the [biotech] company pays a little bit of the principal. By the end of 36 months, they will have paid it all,” she said. Importantly, if the same company then “raises money through equity, it does not change the amortization schedule of the loan.”

“Equity is appropriate for clinical trials and other high-risk activities,” she said. “If a company is out of
money and [its product] is in a mid-stage clinical trial, it’s a bad time to incur debt… If the only source of [debt] repayment” is that one experimental compound, the situation becomes risky. That’s why Hercules likes to deal with companies that have more than one compound in development: “If a compound fails, the company can still survive.”

Indeed. There seems to be no end to the ways in which biotechs and specialty pharmas can raise money. According to Paul Capital’s Flamenbaum, “The healthcare industry is capital-intensive. As long as companies need money, there will be a response.” And there’s at least one niche for each investor. “There is a broad valley of opportunity, from preclinical compounds to commercial products. Each of us focuses on one or more areas,” he concluded.

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