Strategies for Navigating the Life Sciences Capital Crunch
Summary
A range of factors, from aging world populations to rising standards of living in developing countries, are poised to drive long-run demand for innovative drugs, devices and medical technologies that can improve outcomes and reduce costs.As industry participants are keenly aware, life science venture capital financing – which has played a critical role in helping translate research ideas into commercially useful medical technologies – is becoming increasingly scarce.Adding to the challenge, today’s public markets are less receptive to development-stage life science companies, meaning that investors can no longer count on the possibility of an IPO to provide an exit opportunity.Corporate investors are increasingly willing to work with life science companies from the earliest stages (for example, Novartis’ Option Fund), and can provide validation, invaluable feedback on market potential, and a possible path to exit.And perhaps in the not too distant future, big data analytics tools and digital health technologies to support better clinical trials will mature that can help shorten the cycle and reduce the cost of life science R&D.
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