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DRI Capital raises third fund for royalty investments

Authored by Karl Simpson

Royalties for pharmaceutical and biotech products is a constant feature of the way in which programmes get funded and investors get a return. The opportunity to cash in on a multi-year commercial return for a product which gains regulatory approval is seen as a very good way in which to balance the considerable risks inherent in research and development.

DRI Capital is a global leader in the acquisition of these royalties and yesterday announced a $1.45bn fund to continue this investment strategy. With the debt available to the fund, the potential financial reach is close to £3bn. The fund, named Drug Royalty III private equity fund, will see DRI continue to seek royalty acquisition opportunities across Pharma, Biotech, Academia and Research institutions.

These royalty acquisitions will not only come from marketed product but also assets in late stage development too, particularly in phase III. DRI was originally founded in 1992 as Drug Royalty Corporation, and today is the oldest and the largest healthcare royalty private equity fund manager in the world. DRI, headquartered in Toronto Canada, through its Drug Royalty managed funds, has acquired more than forty international life sciences royalty streams on such leading products as Cubicin, Enbrel, Myozyme, Remicade, Sensipar, Soliris, Stelara, Simponi, Synagis, Tysabri and Xolair.

Behzad Khosrowshahi, DRI President and CEO, said, “We have a competitive cost of capital, and we look forward to investing in royalty streams on a variety of differentiated healthcare products over the next several years, including product candidates in Phase 3 of clinical development. We have a long track record of working with royalty holders to creatively structure transactions, and our team is excited to do more deals in the global life sciences community.”

DRI Capital certainly seem to have both the strategy and finance to impact the life sciences investment landscape. It is also another signal that the various pension funds, institutions, endowments and family investors are keen to see their money invested once again in the future of pharmaceutical and biotech.

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