The Trouble with Spin-Offs

Drug firms have created relatively few venture-financed spin-offs. The central reason--the valuation impasse between VC and pharma--is as much pscyhologically rooted as financially.

Q: Why are there relatively few venture-financed spin-offs from pharmaceutical companies, despite the apparent attractiveness of this type of transaction to both venture funds and pharma companies?

A: Not for lack of trying by parties on both sides of these proposed transactions. Yet few of these deals...

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