Symbiotic Capital launches with more than $600M to provide life science loans

As the cost to research, develop and commercialize innovative therapeutics, devices, tools and other products has increased substantially.

With backing from biotechnology entrepreneur Arie Belldegrun, Symbiotic Capital launched on Tuesday with more than $600 million to provide loans to biotechs and other life sciences businesses, the company announced.

Los Angeles-based Symbiotic describes itself as a “first-of-its-kind life science credit firm.” Life science startups typically rely on venture capital funding. Startups may be years from generating revenues and, as such, can lack a path to repaying loans. However, more life science startups have turned to debt financing as access to public and private equity investments has contracted in recent years.

Symbiotic has raised a fund to support companies that want loans. Belldegrun, who founded biotechs including Kite Pharma and the venture capital firm Vida Ventures, is co-chairman of the credit provider. Symbiotic is affiliated with Bellco Capital, the investment firm Belldegrun co-founded in 2003, and fills a gap in the serial entrepreneur’s empire.

As the cost to research, develop and commercialize innovative therapeutics, devices, tools and other products has increased substantially throughout the sector, credit has become an increasingly important financing tool for established healthcare enterprises,” Belldegrun said in a statement. “With Symbiotic Capital, we have designed a science-first credit platform to fuel those endeavors.

Belldegrun is joined at Symbiotic by an integrated science team that includes former Roche CEO Franz Humer and former Cleveland Clinic CEO Toby Cosgrove. The expertise potentially sets Symbiotic apart from more generalist credit companies, which may lack an understanding of the specific challenges that life science companies face.

Symbiotic publicly launched Tuesday but has been providing loans since at least January 2024, when Cleveland Diagnostics disclosed a credit facility from the company. Cleveland secured the loan to support commercialization of its diagnostic tests for the early detection of cancers. Accelus, a developer of spinal implants, closed a $20 million debt facility with Symbiotic around the same time.

The credit firm joins a small group of companies that provide loans to life science companies. Hercules Capital is a frequent provider of life science debt financing. Bluebird bio accessed up to $175 million from Hercules in March. Adaptimmune secured up to $125 million from the venture lending group in May.

Blackstone is another option, particularly for companies that require large sums. The investment group has life sciences and credit units, which worked together to provide PTC Therapeutics with $350 million in 2022 and deliver to Amicus Therapeutics $430 million in 2023.

Silicon Valley Bank (SVB) is another option. The investment group has provided debt financing to companies such as Enveda Biosciences and Puma Biotechnology. However, SVB adopted a less aggressive lending policy than in the past when it resumed providing credit last year after coming through its own financial problems.

The history of life science debt financing includes cautionary tales. Dendreon, a pioneering cell therapy company, filed for bankruptcy in 2014 after failing to grow sales fast enough to manage its more than $660 million in liabilities.

Published on : 07th August, 2024