Royalty Flush: Why Monetizing Tomorrow's Revenue Stream Today Could Catch on in a Big Way

Biotechs remain voracious consumers of capital, but tapping the equity markets is often prohibitively dilutive. Royalty financing can provide lower-cost-of-capital funding while putting a price on assets the market often ignores. This cash can also allow biotechs to hold onto R&D projects longer, eventually pushing up the price of licensing deals. But although royalty financiers are eager, they are limited in the amount of risk they are willing to take; new players in the business though may nevertheless increase competition and drive prices up.

Christopher Morrison

Vertex Pharmaceuticals Inc. CFO Ian Smith explained to a reporter his company’s recent decision to monetize its royalty on...

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