Pink Sheet is part of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction

For Biotech VCs, Anticipation And Adjustments In The Age Of Earn-Outs

Executive Summary

The structured acquisition -- with contingent payments that stretch well beyond the close of the sale – is a permanent part of the biotech investor landscape. While it's certainly a buyer's market, the sellers have been adapting to help boost returns. Are their strategies working?

You may also be interested in...



New Biopharma IPOs Show Modest Step Up In Step-Ups

The IPO drumbeat for drug companies is slow but steady, with valuations looking a bit stronger than 2011. But insider participation, haircuts and dilution are still the order of the day.

Dainippon Buys Boston Biomedical To Build On Cancer Strategy

Japanese pharma Dainippon will gain two clinical-stage novel drugs targeting cancer stem cells and a drug-discovery platform with the acquisition of Boston Biomedical for $200 million upfront and substantial milestones.

Biotech Backers Are Learning to Live with Exit-by-Earn-out

Despite a few bright spots, the fundraising environment remains difficult for many venture investors. Biotechs that went public during the 2005-2007 window have largely underperformed, despite hitting the stock exchanges with what plenty of CEOs and VCs felt were artificially low prices negotiated by an oligarchy of biotech IPO buyers. Moreover, pharmaceutical companies have been buying fewer, not more, biotechs - even as more companies are seemingly created with acquisition, not IPO, in mind. Meanwhile, the M&A deals that do occur are increasingly risk-sharing affairs that resemble alliances, replete with earn-out payments triggered by development, regulatory, or commercial milestones. In short: good venture exits have been extremely hard to come by. And data from Elsevier's Strategic Transactions analyzed by START-UP suggest that although these risk-sharing deal structures may be a by-product of a miserable economy, they are likely to stick around regardless of any economic turnaround.

Topics

Related Companies

UsernamePublicRestriction

Register

PS054383

Ask The Analyst

Ask the Analyst is free for subscribers.  Submit your question and one of our analysts will be in touch.

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel