Private equity firms that deemed drug development too risky for their liking in the past are increasingly investing in the sector, raising dedicated funds and coming up with deals that compensate them for the uncertainty involved. These firms are seeking to capitalize on the growing gap between the supply of capital for clinical research and the number of drugs competing for it, eight buyout executives and investors interviewed by Reuters said. These deals are not structured as the leveraged buyouts that private equity firms are mostly known for. Instead, the buyout firms invest in the development of the drugs, typically when they are in so-called Phase 3 clinical trials, one step away from regulatory clearance. They negotiate with pharmaceutical companies the returns they will receive in advance.
Read the full article: Private Equity Acquires a Taste for Drug Development //
Source: https://www.reuters.com/business/healthcare-pharmaceuticals/private-equity-acquires-taste-drug-development-2023-01-09