New Financing Methods in the Biopharma Industry: A Case Study of Royalty Pharma Inc.
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New financing methods.pdf
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479.11 KB
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Adobe PDF
Checksum (MD5)
d401a8a79e2b2cbe005fac8901aab72d
Author(s)
Lo, Andrew W
Date Issued
July 2014
Journal
Journal of Investment Management
Publisher
Journal of Investment Management
Citation
Lo, Andrew W. and Naraharisetti, Sourya V. "New Financing Methods in the Biopharma Industry: A Case Study of Royalty Pharma Inc." Journal of Investment Management 12, no. 1 (July 2014): 4-19. © 2014 Journal of Investment Management
Version
Original manuscript
Abstract
The biotechnology and pharmaceutical industries are facing significant challenges to their existing business models because of expiring drug patents, declining risk tolerance of venture capitalists and other investors, and increasing complexity in translational medicine. In response to these challenges, new alternative investment companies have emerged to bridge the biopharma funding gap by purchasing economic interests in drug royalty streams. Such purchases allow universities and biopharma companies to monetize their intellectual property, creating greater financial flexibility for them while giving investors an opportunity to participate in the life sciences industry at lower risk. Royalty Pharma is the largest of these drug royalty investment companies, and in this case study, we profile its business model and show how its unique financing structure greatly enhances the impact it has had on the biopharma industry and biomedical innovation.
MIT Department
Sloan School of Management
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Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://www.joim.com/article/case-studies-new-financing-methods-in-the-biopharma-industry-a-case-study-of-royalty-pharma-inc/
