The publication of this study marks the third consecutive year in which we have examined the prevailing trends in the public “synthetic royalty” and drug development financings markets. Over the course of the six-year period now encompassed by this report, companies have continued to turn to these financing structures to meet the ever-increasing costs for research and development of new drugs, and financing providers have continued to refine the terms on offer.

With an anticipated rebound in equity markets having failed to materialize in 2024, more and larger public companies decided to turn to these structures, as demonstrated by a modest uptick in deals and a more significant increase in deal size, led by a $500 million financing early in the year.

In our review, we have seen the market coalesce around a minimum level of bankruptcy protection in the form of security interests over intellectual property and other product assets, but other elements of these transactions remain very much open to customization. This is reflected in our new comparison of negative covenants and put and other repayment obligations across different investors.

In the below report, we present our updated study, which covers the period from January 1, 2019 to December 31, 2024, for transactions involving at least $25 million entered into by public biotech companies.

Although commercially sensitive information was redacted from some publicly filed documents, sufficient information was available to provide a good sense of market terms.