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Archives - November 2011

Capital Fundraising for Biopharmaceutical Companies

November 01, 2011
By Hing C. Wong, Ph.D., Altor Bioscience Corporation

Tampa Bay Innovation Center recently hosted a TECH Talk session with Hing C. Wong, Ph.D., CEO of Altor Bioscience Corporation, who discussed capital fundraising strategies for biopharmaceutical companies. We’ve summarized his “lessons learned” for succeeding in the biopharmaceutical industry and securing appropriate funding.

As challenging as capital fundraising is in almost any industry, fund raising in the biopharmaceutical industry is unique from other industries due to its lengthy product development cycles as well as the long path to reach an exit strategy. There are a few fundraising obstacles and opportunities every entrepreneur in the field should be aware of:

  • Biopharmaceutical companies are a long-term investment for investors – sometimes requiring as long as eight to 10 years – with capital requirements of up to $70 million, so its appeal to investors may be somewhat limited. 
     
  • Biopharmaceutical companies incur greater risk and require a longer time frame than, say medical device manufacturers, because the clinical trial period requires multiple stages as well as testing on humans.  There is no easy money, so you must love what you’re doing.
     
  • Safety issues must be balanced against the desire for speed to market for investors and entrepreneurs.
     
  • Venture capitalists receive hundreds of proposals and you cannot become discouraged when yours is rejected. Be persistent.
     
  • Grant writing and non-dilutive funding can be difficult to secure, but are ideal options to grow a company and develop corporate partnerships.  You must be willing to make a commitment to grant writing, even though it is demanding and time consuming.
     
  • It’s important to demonstrate the results of your research in grant applications. 
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