Biotech Values

[DewDiligence]

How does Big Pharma determine the amount of upfront cash in deals with private biotech companies? According to this piece from xconomy.com, the answer in many cases is that Big Pharma offers an amount that exactly equals the VC’s cumulative investment in the biotech company, i.e. an offer with the implicit message, “Here’s you money back—take it or leave it!”

http://www.xconomy.com/san-diego/2011/02/17/avalons-kinsella-calls-out-big-pharma-for-bad-behavior-thats-pushing-biotech-ventures-almost-to-point-of-extinction

(Thanks to BulbaMan on SI for this find.)