Article preview from IN VIVO February 17, 2008
As Wall Street fails to significantly reward companies with strong clinical news, the fall-out also affects the project financiers, like Symphony Capital -- an increasingly important alternative to traditional equity or alliance financing. On one hand, the hard times make Symphony's expensive-looking capital increasingly attractive to biotechs, including companies that once would have had plenty of other financing alternatives. On the other, Symphony's model is shifting more toward equity investing. It's still financing projects, but it's padding its upside with a lot more cheap stock. Read on...
Article preview from IN VIVO February 17, 2008
Project financiers such as Symphony Capital are feeling the effects of the economic turndown. Making lemons out of lemonade, Symphony is tweaking its model to get a bigger equity upside from its investments.
By Randall Osborne
As Wall Street fails to significantly reward companies with strong clinical news, the fall-out also affects the project financiers, like Symphony Capital Partners, which are increasingly seen as important alternatives to traditional equity or alliance financing. On the one hand, the hard times make Symphony's expensive-looking capital increasingly attractive to biotechs, including companies that once would have had plenty of other financing alternatives. On the other, Symphony's model is shifting–albeit slightly–more toward equity investing. It's still financing projects, but it's padding its upside with a lot more cheap stock.
Symphony's basic idea is to provide affordable financing for biotechs whose programs lack the clinical data to allow them to raise money from Wall Street at acceptable valuations. Its goal is to bridge the gap between preclinical and Phase II--at which point the value of the program should spike dramatically.
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Companies Mentioned
Alexza Pharmaceuticals Inc.
Dynavax Technologies Corp.
Eisai Co. Ltd.
MGI Pharma Inc.
Guilford Pharmaceuticals Inc.
Exelixis Inc.
Genzyme Corp.
Isis Pharmaceuticals Inc.
Johnson & Johnson
Lexicon Pharmaceuticals Inc.
Merck & Co. Inc.
Oxigene Inc.
Quintiles Transnational Corp.
