Hot Life Science Investor Mandate 1: PE Debt Provider Specializes in Healthcare, will Invest as Early as Phase II

20 Nov

A firm that provides debt financing to companies in the life science and healthcare sectors is based in the Eastern US, and offers financing in the forms of senior secured term loans, cash flow loans, revolving lines of credit, real estate and equipment loans. Loans may vary in size from $500,000 to $40m, with ranges and payment terms varying according to the type of loan provided.

The PE typically issues about $400-500m in debt per year. Debt is provided to companies for working capital, growth, expansions, recapitalizations, product licensing or acquisitions, or to purchase equipment or real estate. The firm considers opportunities in the USA, Canada, Europe and Oceania.

In the life science sector, the PE invests in companies developing therapeutics and medical devices.  The firm considers lending to therapeutic companies with a product in the Phase II development stage or later, or to devices in the clinical development stage or later.  They invest opportunistically, but typically avoid the diagnostics and the ophthalmology subsectors (particularly when considering single-asset companies). The firm seeks to invest in differentiated technologies, not products that will bring marginal increases in standards of care.

The organization invests in both post-revenue and pre-revenue companies.  In pre-revenue companies, capital-intensive projects are avoided; they typically deploy capital to bring a company to the next inflection point (such as the break-even point, or an acquisition). The firm prefers to lend to companies that have already received the backing of a number of institutional investors such as VCs, and the ability of these investors to provide follow-on financing if necessary is a key part of their evaluation of an opportunity.  When considering management teams, the PE prefers those who have prior experience in industry and have learned from their past successes or past failures.

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