“What used to take a year can now be done in a day, and the pace of R&D has accelerated exponentially.”
Over the last 20 years, there has been a revolution in molecular and cellular biology, which has resulted in new discoveries and novel approaches to fight or even cure the most challenging of diseases. In parallel, notable advancements in laboratory technology, robotics, and computational power have enabled life sciences R&D to operate at significant scale and allowed science to advance at speeds that were inconceivable 20 years ago – experiments that once took months can be done in a day and for significantly lower cost.
These paradigm shifts have driven a significant expansion of the life sciences industry and a notable uptick in new company formation. The field remains risky and competitive however, and as the pace of innovation and R&D in life sciences has accelerated, companies need to be very thoughtful and strategic in determining which new drug targets to explore and potential therapies to develop and in marshalling significant capital resources behind these efforts. It can take 5-15 years for a drug candidate to be fully developed into a commercially available medicine, and life science companies find themselves in the unique position of serially raising capital in order to fund long-term development cycles, both for individual products and broad platform technologies.
The good news is that investment in the sector has kept pace with the sector’s growth and expansion, with notable inflows for both private and public life sciences dedicated funds. Established pharmaceutical companies have also increased their investment in life sciences through a variety of avenues, including corporate venture, R&D collaborations, licensing, and acquisitions.
While most of the financial investment has historically come from equity funds, life sciences companies have increasingly looked for a broader variety of sources of capital to fuel their pipeline of innovation. This has created a need and opportunity for new specialty financing solutions that fit this growing, dynamic industry and complement traditional equity and strategic capital. One example is the less dilutive debt capital that K2 HealthVentures (K2HV) specialises in, which helps companies finance their development and growth plans alongside and in between equity raises – whether to help extend cash runway and reach key value-inflection points, or to strengthen their balance sheets ahead of negotiations with strategic partners or IPOs.
It is truly an exciting time to be part of this highly impactful, fast moving industry, and K2HV feels privileged to partner with innovative life sciences companies for financing solutions that fuel their growth and support their patient-driven missions.