A survey targeted at 100 California, US-based, healthcare companies expects a tripling of chief executives (CEOs) to look to corporate venturing units for finance this year.
The CHI-California Healthcare Institute, Northern California’s life science association BayBio and accountants PwC US said their survey found corporate venture funding was expected to become a much more crucial source of funding to the industry. It found 30% of CEOs surveyed saying theywould tap corporate venture capital as a finance source in the next 12 months, versus 10% who did so in the past 12 months.
And other financing sources than angel and venture capital were also increasing. Forty-four percent of biomedical CEOs surveyed said they would look to licensing agreements and corporate partnerships as a source of finance in the next 12 months, double the number of CEOs who last year said their companies were using this avenue for finance.
Though still only a small contributor to the finance equation, disease foundations/non-governmental organizations are growing as a funding source for 11% of CEOs who plan to use these funds in the next 12 months, versus only 4% who did last year.
Tracy Lefteroff (pictured), national life sciences partner at PwC US, said: "Biomedical companies have long relied on government grants and venture capital to finance innovation, but funding sources are shifting and companies will need to adapt to a new reality.
"While venture capitalists and angel investors will continue to be an important source of funding, it has become increasingly difficult for biomedical companies to gain access to them. Alternative sources of funding are emerging, which highlight shifting opportunities and dynamics in life sciences innovation."