How to optimize your biotech company for partnering, licensing, and business success

What It Covers

Field Fisher partner Janita Good outlines how biotech companies can structure themselves from inception to maximize partnering and licensing outcomes with large pharma, covering corporate architecture, equity documentation, commercialization planning, and current market conditions heading into 2024's gradual sector recovery.

Key Questions Answered

• •Hub-and-spoke corporate structure: Set up a holding company (HoldCo) with separate subsidiary SPVs for each asset — one for the platform, one per lead asset, one per pipeline program. This packages each asset cleanly for pharma acquisition, allows partial exits via share sales, and avoids messy IP extraction from a single-entity company later.
• •Start partnering conversations from day one: Large pharma regularly makes strategic minority investments in early-stage biotechs — Takeda and Eli Lilly are cited examples — specifically to evaluate lead assets before committing to full M&A or licensing deals. Waiting until clinical milestones to engage pharma means missing these early relationship-building and deal-structuring opportunities entirely.
• •Run your exit waterfall spreadsheet continuously: Founders and CFOs must model exactly who receives what under every exit scenario at each funding round, accounting for participating versus non-participating preference shares, drag rights, and tag rights. Many M&A deals in biotech stall or fail specifically because equity structures were never properly stress-tested against real exit scenarios.
• •Fix data room problems before investors find them: Undisclosed freedom-to-operate issues or potential patent infringements discovered by VCs during due diligence destroy deal momentum and trust. Proactively identify and resolve IP landscape risks before entering any fundraising or partnering process — advisers who see high deal volumes can flag these blind spots that first-time founders routinely miss.
• •Commercialization planning must start at company formation: Founders should work backwards from market questions — market size, competitor landscape, regulatory pathway, reimbursement strategy — before advancing development programs. Virtual companies can buy in commercial expertise rather than hire full-time, but failing to answer these questions early undermines both investor confidence and eventual pharma partnering negotiations.