They’re not just for seed rounds anymore: in the life sciences, rich individuals are supplying more early stage capital than ever, occasionally well past the Series A stage, and some are banding together into groups that look increasingly like traditional venture capital. How far will this phenomenon fly?

With no public market to provide competition, the theory among biotech's optimists was that Big Pharma would step in and buy lots of bargains. But cheap prices and easy availability haven't increased drug company appetites: They will only buy what they really want. Deal volumes, both for M&A and alliances, are falling, while Big Pharma has learned to put more of the risk back on biotech. What will change this dynamic, putting more bargaining into biotech hands, is the revival of the public market - and there are hints that such a revival may be on the way.

Corporate venture groups are poised to become one of the main sources of funding for early-stage biotechs thanks to the current economic climate. Even if corporate venture groups invest at the same levels as previous years, some industry veterans believe they could play a role in up to half of the early-stage financings this year, largely because the traditional sources of financing--the public market and venture capital groups flush with cash--have disappeared. And the new vigor of corporate venture offers big benefits to both small biotechs and Big Pharma.

Constellation and EpiZyme are poised to become dominant players in the unfolding field of epigenetics, an area of biology replete with novel, interesting targets and broad therapeutic potential. The two companies have adopted similar and until now stealthy strategies, aimed at parlaying a platform of novel products into a quick and lucrative exit.