Biotechnology holds the potential to treat, if not cure, many devastating diseases. Drug development is expensive and can take upwards of a decade.
This dynamic requires the biotech company to identify sources of capital to fund clinical development and achieve their goal of curing a disease.
One source of capital is licensing a lead product to a pharmaceutical company. The biotech can then use that capital to develop other assets. Where companies find the most challenging financial environment is during the long stretches of time while they are waiting for a clinical study to complete and read-out. As many investors in pre-commercial biotechs focus on these binary inflection events, raising money during those periods through public offerings can be very challenging and expensive.
