Biotechnology is a more and more important field of research in present. Publicly we are currently confronted with many questions about the rights and wrongs within this field of science, like how to handle the issue of gene manipulation or stem cell research. However, biotechnology is more than just an accumulation of ethical questions and science – it is a whole industry and as such interesting for investors.
The scope of this paper is not dealing with the topics discussed in glossy magazines, but it addresses the issues of corporate finance in biotechnology. In order to get an overview of the industry from a finance point of view, the industry has to be portrayed. Hence, this is the topic of chapter two.
From the point of the investors, and therefore of the capital markets, the understandability of the segment biotechnology, and thus the availability of crucial information has to be ensured.
Consequently the transparency of the biotechnology segment and of the individual enterprises, respectively, are the topics of the third chapter. The implications of this chapter have a strong impact on the valuation of biotechnological companies and the sector as a whole – a subject dealt with in chapter number four.
The fifth chapter is concerned with the core topic of this paper and identifies and analyses different sources of finance for biotechnology enterprises. Thereby it is taking the point of view of the biotechnology firms and the potential investors. The paper is showing important difficulties and advantages connected with the different approaches. Additionally the chapter also describes and evaluates the risks of different options of investors.
The paper is concluded with a summary of the findings in chapter six showing that investing into biotechnology is worth thinking about for a responsible and sophisticated investor, although the segment is a difficult field incurring many risks, however opportunities for the “big win”, as well.
Inhaltsverzeichnis (Table of Contents)
- Introduction.
- Life Science - An Overview
- Red, Green and White Life Science - What is the difference?
- Current Trends in the Biotech Segment...
- Business Models in Biotech..
- Transparency in the Biotechnology Sector.....
- Specifics in Investor Relations.......
- Specifics in Corporate Governance...
- Specifics in Financial Accounting and Reporting
- Company and Sector Valuation ......
- Valuation Approaches ......
- Five-Forces Model for the Sector...
- Traditional Valuation and Specifics for Biotech.
- Specifics for Pharmaceutical Development ...
- Specifics for Technology- / Service- Providers...
- Financing Sources…......
- Initial Financial Sourcing
- Governmental Funds and Politics..
- Incubation Concept.
- Private Equity.
- Venture Capital.
- Business Angles.........
- Strategic Investments and Other Financing Possibilities.
- Secondary Financial Sourcing....
- Investor's Strategies..
- Direct investments..
- Private Equity Funds
- Fund-of-Funds
- Comparison of Risk Profiles...
- Alternative Investment Vehicles
- Exit Options for Initial Capital Providers.
- Initial Financial Sourcing
- Summary..
- Sources
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper examines the intricacies of corporate finance in the biotechnology sector. It goes beyond surface-level discussions, focusing on the financial realities of biotechnology companies and their interactions with the capital markets.
- Understanding the Biotechnology Industry: The paper provides an overview of the biotechnology industry, including its various sub-segments and business models.
- Transparency in the Biotechnology Sector: The paper delves into the importance of transparency for biotech companies, particularly in terms of investor relations, corporate governance, and financial reporting practices.
- Valuation of Biotech Companies: The paper explores different valuation approaches for biotech companies, considering the unique characteristics of the sector.
- Financing Sources for Biotech Companies: The paper analyzes a range of financing sources for biotech companies, examining the specific needs of the sector and the risks involved for investors.
- Investment Strategies for Biotech: The paper presents different investment strategies for investors considering biotech, including direct investments, private equity funds, and fund-of-funds.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter sets the stage for the paper, highlighting the growing importance of biotechnology research and its financial implications. It outlines the paper's scope and its focus on corporate finance within the biotechnology sector.
- Life Science - An Overview: This chapter provides a comprehensive overview of the life sciences sector, drawing on the OECD definition and exploring the different sub-segments of Red, Green, and White biotechnology. It also discusses current trends and the various business models prevalent within the biotech segment.
- Transparency in the Biotechnology Sector: This chapter explores the crucial role of transparency in the biotechnology sector from an investor's perspective. It examines specific practices in investor relations, corporate governance, and financial accounting and reporting that are particularly relevant to biotech companies.
- Company and Sector Valuation: This chapter focuses on the valuation of biotech companies and the sector as a whole. It examines various valuation approaches and the unique considerations for biotech, taking into account the specific characteristics of pharmaceutical development and technology-based service providers.
- Financing Sources: This chapter delves into the core topic of financing sources for biotech companies. It examines a variety of initial and secondary financing options, including governmental funds, incubation concepts, private equity, venture capital, business angles, and strategic investments. The chapter also analyzes the risks associated with different investment options for investors.
Schlüsselwörter (Keywords)
This paper delves into key themes and concepts related to the financing of biotech companies, including corporate finance in the biotechnology sector, transparency in the biotechnology industry, valuation of biotech companies, financial reporting practices, investor relations, corporate governance, venture capital, private equity, and investment strategies.
- Quote paper
- Christian Strassburger (Author), 2006, Financing in life sciences biotech companies, Munich, GRIN Verlag, https://www.grin.com/document/70419
