01 November 2012

Venture investments in biopharmaceuticals are unprofitable

Allan May: "The venture model no longer works"

Nikolai Dzis-Voynarovsky, Slon.ruAt the Moscow Open Innovations Forum, Allan May, Managing Director of the medical firm Emergent Medical Partner, shared several insiders about how investments in biopharmaceuticals work.

A study by the Kaufmann Foundation showed that in 2012, 78% of American venture capital firms brought zero income, while the remaining 22% had income above zero.

The venture capital model no longer works, especially in the natural sciences. This can be seen from the fact that from half to two thirds of all investments in biopharmaceutical companies at an early stage are investments of "angels". This is much more than in IT. The reason is that the payback period is too long for venture investors, plus the financial crisis.

As a response to the changing situation, new non-standard business models are emerging. For example, informal associations of doctors who invest not in the creation of a company for the production of medicines, but in the creation of medicines themselves. Or there are non-profit organizations that are engaged in the creation of medicines.

Portal "Eternal youth" http://vechnayamolodost.ru01.11.2012

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