Facing a subdued IPO market and a tempered pace of venture investment, biotech and life sciences companies are eschewing traditional sources to fund growth, instead turning to loans. Companies are encountering lenders flush with cash—resulting in lower spreads and more favorable loan documentation to fund commercialization of drugs and treatments, compared with what had been available to them in recent years. Although loans to biotech, medtech and life sciences companies are highly bespoke, spreads on these loans can range from S+650 basis points, and sometimes below, while a lower-quality borrower might achieve a spread of S+800 bps, market participants say.
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Source: https://pitchbook.com/news/articles/with-lenders-galore-life-science-companies-find-debt-cheaper