* in the current market, with credit tight, more cash-strapped biotechnology companies are putting their royalty streams up for sale;The leading funds in this area are named as Royalty Pharma, DRI Capital, Paul Capital and Capital Royalty, with mention being given to a new fund, Cowen Healthcare Royalty Partners, which was formed earlier this year by a team that broke away from Paul Capital. The article mentions that in April, TPG-Axon Capital, a hedge fund with more than $15 billion under management, agreed to pay CV Therapeutics up to $185 million in exchange for rights to 50 percent of its royalty on North American sales of Lexiscan, a stress agent used in the detection of coronary artery disease.
* investors seeking stable returns in a volatile market have come to appreciate patent royalties as a more reliable source of income.
Monday, 25 August 2008
Equity funds move to acquire patent royalties
A Reuters feature, "Drug royalty financing thrives in difficult market", by Toni Clarke, reports that private equity funds which specialize in healthcare royalty financing are gaining momentum as investors seek new ways to hedge risk, and companies seek new ways to raise capital. Apparently, the specialty funds are benefiting from the convergence of two things: