Insights / 11 January 2021

Private Equity and Biotechnology

Michael Johnson

Michael Johnson explores the roles investors play in the development of the biotech industry in a recent Q&A with Alex Rolandi for Funds Europe. 

Discussing what due diligence private equity firms must carry out when investing in biotechnology, he explained, “With a high degree of interest in biotechnology even before the pandemic hit, private funds have been going in with their eyes wide open. Funds will seek out a product roadmap, check the science behind the potential product, look at preclinical pharmacology and toxicology reviews, investigate chemical manufacturing and supply chains and want to identify what intellectual property rights exist or are likely to in the future.” 

He goes on to share his thoughts on how private capital investors can ensure biotech is not used in nefarious ways, commenting “there is a heightened awareness around ESG [environmental, social, and governance] principles and impact investing amongst privates, their investors and amongst founders themselves. Many a pitch from a GP to an LP or a founder to a GP will have been rejected for not paying enough attention to ESG or impact principles. Founders often do have ESG or impact values at the core of their business philosophy, and will also be looking for backers who reflect or respect these values.” 

Commenting on the state of the industry, Michael explained, “For now, there’s certainly a feeling in the private [markets] industry that biotech will never be the same again: never before in human history has a vaccine been this close to being developed this quickly, and that takes a huge amount of resourcefulness and agility.” 

Read the full article here.