Pharmaceutical companies venture capital implantation success

In the past few years, the venture capital companies of pharmaceutical companies have continuously stepped up their investment and frequency and funded more biotechnology companies. Facts have proved that companies with companies involved in venture capital construction can greatly increase the success rate. This is the discovery of Bole's statistical analysis of venture capital data over the past 12 years.

Bole found that biopharmaceutical companies that are funded by pharmaceutical giant companies are more likely to obtain licensing agreements from large companies, are more likely to obtain IPO opportunities, and are more likely to be acquired by large companies.

According to Bole's data, 2,907 companies have received financial support from more than 5,000 venture capital institutions since 2000. Among them, 10% (that is, 286 companies) have received financial support from venture capital companies in their growth process, and 25% of these companies are eventually acquired by large pharmaceutical companies. For companies that did not get venture capital, only about 14.4% of the companies were acquired. And, nearly half of the biotech companies that are supported by venture capital firms have been licensed to trade; compared to only 30% of other biotech companies, they have the opportunity to obtain technology transfer licenses. The proportion of enterprises that have obtained venture capital support for enterprises to complete the IPO is 12.2%, and only 7.8% of the enterprises that did not obtain venture capital to complete the IPO.

You may think that the greater chance of success is due to the fact that “there is time for getting ahead of the water”, which increases the chance for companies to be acquired. But this is not the case, Bole data shows that only 6% of the acquisition by the company's parent company venture capital acquisition, the vast majority of purchasers for other pharmaceutical companies.

It is not clear what the reason is. Bole's explanation is that this reflects the company's venture capital, once involved, will give the company better guidance. "At least let companies understand that what kind of project has a greater chance of success or is hoped for by companies." Bole CEO Steve Bole said.

Bruce Booth, a partner at Atlas Venture Capital, points out that even if it is also a venture capital venture, there are some differences. Some enterprise venture capitals are basically semi-independent within the enterprise group. There are also some venture capital departments that mainly seek out products and development companies that are directly related to the company's business model. He believes that Bole's numbers may reflect the ability of pharmaceutical companies to select better companies. It may also be due to investment in the future implied guidance from industry resources and experts, making these companies supported by venture capital companies more likely to succeed. Bruce Booth preferred to favor the latter explanation that there is corporate guidance and verification.

Data from the past 12 years shows that biopharmaceutical companies that are supported by enterprise venture capital are more likely to obtain licensing agreements from large companies, are more likely to obtain IPO opportunities, and are more likely to be acquired by large companies.