A Growing Force
This is not the first time that the pharmaceutical and biotechnology industries have faced difficult markets and reduced access
to capital. Previous market upheavals have been characterized by Darwinian dynamics, with larger, cash-rich companies often
devouring smaller, less robust companies. Some smaller companies have found synergies with one another that enable them to
evolve in direction and scale into a new entity that can survive in a more challenging financial environment.
Today, royalty monetization and revenue interest financing have the potential to generate substantial, immediate capital injections
that can have a transforming effect on healthcare companies. Moreover, with the ability to raise several hundred million dollars,
these transactions are now more than just a blip on the radar of large and mid-sized pharma companies. While many of the big
players have sufficient cash reserves to weather the current financial crisis, their ability to access additional capital
outside the equity and debt markets gives them unparalleled flexibility in deploying their financial resources and managing
Darwinism will ultimately rule the day, but the availability of alternative funding strategies may provide a greater number
of healthcare companies with the financial resources they need to avoid becoming dinosaurs.
Walter Flamenbaum can be reached at firstname.lastname@example.org
; Lionel Leventhal can be reached at email@example.com
; John Leone can be reached at firstname.lastname@example.org
. All three are partners at Paul Capital Healthcare.