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Monetizing Future Prospects Now

This article was originally published in Start Up

Executive Summary

Investors in the drug business have had to choose between high-risk, high-reward biotechnology and lower-risk, established pharmaceutical companies with predictable earnings streams. In either case, they take on development risk--the possibility that products will fail in clinical trials and affect the company working on them. But now Paul Capital Partners hopes to capitalize on the largely unexplored niche of investing only in commercial risk. It recently closed its $300 million Royalty Acquisition Fund to effectively buy out streams of royalties from marketed products, paying up-front for a drug's lifetime of royalties.

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