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Strategic Spin-Outs: Biotechs Structure Their Progeny For Success

 
• By Deborah Erickson

Placing assets in new companies is a growing trend for biotech start-ups; freed to evolve differently, spin-outs are structured to increase exit options and maximize investor returns. We profile Envisia Therapeutics, F-star Alpha, Onkaido Therapeutics, Seragon Pharmaceuticals, and True North Therapeutics.

Always look for the exit: the past decade's slack public stock markets have underscored the importance of this adage. Venture capitalists worldwide have found themselves stuck holding investments much longer than expected. Although the markets in 2013 began again to welcome some biotechnology companies, no one knows how long this window will stay open. So growing numbers of investors are favoring business models that maximize exit opportunities.

Increasingly, investors are helping their portfolio companies transfer certain assets into new corporate entities that can evolve independently. Such ventures...

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