New partnership and investment models for early-stage companies

While 2018 was a bumper year for Series A investment into biotech, there’s still a great need for new partnerships and investment models. This BIO-Europe Spring® panel, moderated by In Vivo’s executive editor Lucie Ellis, and sponsored by Lilly, looked at some of the latest approaches.

The main barriers to entrepreneurs growing their companies are access to finance, coupled with the ability to pitch successfully for investment, and access to talent, followed closely by access to infrastructure such as lab space. The panel discussed how new models for partnership between academia, the health sector and industry are essential to help move innovation into clinical practice, especially at the early stages of translational research.

Access to early finance remains a challenge

Michael Johnson, Lilly’s VP of transactions, explained that as well as the traditional partnering approaches of collaboration, licensing and acquisitions, Lilly also offers non-dilutive exclusive option type arrangements which can provide some initial non-dilutive capital with an option to acquire the company at an agreed value inflexion point. This is a good opportunity to tap into the pharmaceutical company’s expertise, although the downsides are that the upside may be capped, and it could be harder to engage with other partners. Michael expanded on this theme, adding that for early stage research-based collaborations, the funding could be structured around resources and a target discovery type license, collaborations which later move to a milestone and royalties type deal.

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