Earnouts and Biotechnology Acquisitions
This article was originally published in Start Up
Acquisitions of biotechnology companies have been rare, in part, because of the challenge of valuing them. Target companies are usually years away from earnings; the stock prices of both the acquirer and target often fluctuate widely; and acquirers are afraid that a biotech's most valuable assets--its people--will walk away after the deal. earnouts can be helpful in addressing all of these issues.
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