Morgan Stanley has unveiled a $250 million intellectual property securitisation for Vertex Pharmaceuticals, a US-based biotech company, reported Financial Times.
Companies would like to seal such deals, as they get to keep the assets and do not have to dilute their equity even during any upside from other sales and license agreements. Further, as the deal is structured in a special purpose vehicle, they do not have to face additional risk in the event of any drug failure.
The bankers at Morgan Stanley have been on the look out for similar deals over the past five years. In fact, the bank was successful in completing five deals last year, before the collapse of Lehman Brother’s shook the market.
Thomas Cahill, Co-head of Morgan Stanley’s structured products group, said: “We think other holders of royalties will start to avail themselves of this technology and the rationale. The products are bespoke, but we believe there are enough investors prepared to do their own homework for the deals to become more common.”
