What Types of Deals?
Many companies and universities have licensed their technology or products and are eligible to receive royalties.
Public markets typically afford little credit to public companies receiving royalties and such companies may require financial support either to commercialize their product or complete development of a wholly owned product that will drive their share price.
Similarly, universities receiving royalties over several years may have immediate revenue needs for operating expenses, capital expansion and the like.
PDL can monetize either all or a portion of such royalties making cash either immediately available or in tranches over time as required by the company or academic institution.
In situations where the counterparty does not have a royalty, PDL works with it to create a synthetic revenue interest which can then be monetized.
Some companies with predictable revenue streams prefer debt, particularly if the eventual size of their revenues is difficult to forecast.
PDL works with counterparties to construct flexible debt facilities that support the counterparties in the attainment of their business objectives. No two businesses are identical; for that reason no two of our debt facilities are the same.
- Some companies prefer elements of a debt facility and a royalty monetization.
- PDL shares some of the risk in this structure.
- The company receives a lower interest rate on the debt portion of the structure by giving PDL a modest royalty on the company’s revenues.