Life Sciences - The Case for Unique Financing/Exit Structures

As discussed in our previous post, there is a competitive necessity for acquisition-driven growth in life sciences. 

Acquisitions reflect, in part, an outsourced R&D function: Larger players depend on external sources of innovation to grow, but prefer to develop therapeutic or device assets once substantial clinical and regulatory risk has been removed or hedged against. The often binary success pattern of single-product/platform companies (and the reality that only significant investment will uncover a company’s actual value) has led to a shift from traditional to novel structures in life sciences.

Deciphering what are now available and competitive terms for financing and liquidity is critical to small and middle-market life sciences companies. This complexity has been compounded by the fact that IPOs are not a viable exit for the vast majority of life sciences companies and venture capital funds are struggling to raise enough capital to see their portfolio companies through to meaningful inflection points.

Subsequent posts will point out some of the trends we are following.