The Commission on Financing A Public Benefit Biotech Industry
The Commission launched October 2022 with members discussing the established industry and nature of the problems brought on by the current financial model. Inspiration, innovation, and enthusiasm continues to flow. Our LinkedIn page will provide updates.
The cost of capital determines the output of our industry
Developing new medicines and diagnostics is difficult, expensive, and lengthy.
This is why biotech companies are initially funded with high risk/high reward investors such as venture capital early on, then financed by private equity and ultimately public markets (where 65-90% of profit is spent servicing shareholders).
Thus, capital sources determine which medicines will be produced: those that meet the demand for highest returns/profits
The output: We only have treatments for 10% of human diseases.
Shouldn’t there be more treatments for more diseases? Yes, how do we make it happen?
Public benefits vs. shareholder benefits
If we want companies that are aligned to public benefits vs. shareholder benefits, we require a financing system that supports more affordable medicines.
Companies could invest in therapeutic, preventative, and diagnostic products available at a sustainable cost to our healthcare system while still meeting shareholder expectations. To do so, companies need:
- Investments for longer term (10+ years), with regularly distributed, modest “bond-like” returns
- A continuum of capital structures/vehicles that can sustain companies from early to mature stages
Want to contribute to this exciting innovation in investing? Yes, I want to contribute!
Financing is changing to address the climate crisis, it’s time for financing to change to address the medical crisis
If climate change is transforming today’s financial markets, why shouldn’t financial innovation meet our needs for diversified, affordable medicines?
Just as Blackrock can implement new, sweeping, pro-environment policies in which “sustainability is the new standard for investing”, so can our industry establish investment priorities for global, sustainable, affordable pharmaceuticals.
Developing a new financial model – Process, steps, outcomes:
A Commission of Financial Innovators
“Teach One” – “Do One”
Want to learn more about the Commission? Send us your coordinates.
Help shape the new financial curve
The Commission’s work will be the foundation of the next generation of biotechnology companies. It’s time to save our healthcare economy while delivering more medicines for all of us.