Ebb & Flow
Cowen was no slouch on the biotech financing front in 2006, underwriting at least $2 billion of the sector's IPOs, follow-ons and private placements/registered directs. Now, the firm hopes to add another leg to its business via the formation of Cowen Healthcare Royalty Partners.
Two of the founders of CHRP - Todd Davis and Clarke Futch - clearly know that business. They came over from Paul Capital, where they were focused on the firm's royalty business. Both will be managing directors at Cowen and principals of CHRP.
CHRP plans to raise an undisclosed amount of interim capital and expects to launch a "more formal fundraising" in October. That's when Gregory Brown is slated to join CHRP. Brown worked at Paul from 2003 to 2006 and currently is an industry consultant.
From a company perspective, the obvious advantage of royalty financings is that they avoid dilution. Moreover, said Futch,"many small companies don't get valued on their royalty assets. We're able to find that value and give the company money that it can redeploy" to other projects.
For Cowen, the royalty arm has multiple advantages, "Our investment bankers get another product to talk to companies about when discussing how to finance their business," Executive Vice Chairman Greg Malcolm told Ebb & Flow. "That distinguishes us from other