Clinical Co-Development

Clinical co-development allows biotechs and pharma firms to keep R&D assets going at no risk or cost to them unless a pre-agreed milestone, such as regulatory approval, is met. Biotechs can thereby avoid raising dilutive cash, and pharma can progress non-core assets if in-house R&D is overburdened.

Co-development firms and their investors get a shot at out-sized returns on carefully selected post-proof-of-concept assets, without the burden of building up management teams and portfolios from scratch. (Those returns come much faster than the average drug development cycle, and may reach 3x or more, according to one VC not involved in these deals.)

Co-developers carefully due diligence the assets they agree to take on; Tim Haines, Abingworth chairman and managing partner, claims that the teams’ expertise in optimizing study design and selecting trial endpoints can add 15% to average success rates. Assembling a portfolio of co-development assets, as Avillion and SFJ Pharmaceuticals do, reduces risk further still.

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