Big Partnerships Give Biotechs A Boost To Richer Exits
This article was originally published in Start Up
Biotechs in recent years are more likely to fetch a higher acquisition price – practically the only way for investors to exit these days – if the company has previously signed a major alliance. But the partners aren't necessarily the ones buying.
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With M&A exits on the minds of venture investors and management alike, the idea that a strategic alliance on an important project or platform application might dilute downstream acquisition value is a serious consideration for biotech firms. Yet an analysis of private biotech acquisitions from January 2005 through early September 2008 suggests that those firms that strike a strategic alliance prior to acquisition actually do much better, exit-wise, for their backers.
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