Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • Feature
  • Published:

Biotechnology financing dilemmas and the role of special purpose entities

Before they fell into disfavor, legally independent affiliates of biotech companies—special purpose entities—had supported the development of several blockbuster drugs. Are they about to stage a comeback?

This is a preview of subscription content, access via your institution

Access options

Rent or buy this article

Prices vary by article type

from$1.95

to$39.95

Prices may be subject to local taxes which are calculated during checkout

Figure 1: SPE structure.
Figure 2

References

  1. Recombinant Capital. Year-end '98 financing numbers: A Tale of Two Biotechs. Signals Magazine, (http://www.signalsmagazine.com) February 7, 1999.

  2. Ernst & Young LLP. Convergence: Ernst and Young's Biotechnology Industry Report, Millennium Edition (Ernst & Young, New York, 2000).

  3. Solt, M.E. SWORD financing of innovation in the biotechnology industry. Financial Management 22, 173–187 (1993).

    Article  Google Scholar 

  4. Edwards, M. et al. Value creation and sharing among universities, biotechnology and pharma. Nat. Biotechnol. 21, 618–624 (2003).

    Article  CAS  Google Scholar 

  5. Financial Accounting Standards Board. Exposure Draft, Proposed Interpretation: Consolidation of Certain Special Purpose Entities, an interpretation of ARB NO. 51, File ref. no. 1082-200 (FASB, Norwalk, CT, June 28, 2002).

Download references

Acknowledgements

The authors would like to thank the two dozen executives, investment bankers, investors and accountants who generously gave their time and shared their opinions in the interviews that form the basis for much of this research.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Leora Schiff.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Schiff, L., Murray, F. Biotechnology financing dilemmas and the role of special purpose entities. Nat Biotechnol 22, 271–277 (2004). https://doi.org/10.1038/nbt0304-271

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1038/nbt0304-271

This article is cited by

Search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing