Driving biopharma innovation with royalty financing
Role of royalties in funding biopharma innovation
From lifesaving breakthroughs to blockbuster therapies, biopharma’s next-gen innovation demands bold ways to fund ambitious science projected to exceed $1 trillion over the next decade. As biopharma industry is evolving towards a more diversified funding model, royalties are playing a critical role in fueling the next wave of breakthroughs. Read how biopharma leaders are unlocking growth and reshaping their future with transformative strategies.
The next frontier in biotech funding strategies
With rising costs of capital and intense pressure to sustain R&D momentum, companies are exploring options beyond traditional capital sources and biopharma leaders are embracing royalty deals in unprecedented numbers—reshaping how they fuel innovation. This surge in novel biotech funding enables organizations to access flexible capital, advance research and development, and sustain growth in a challenging market.
Explore five key findings from a Deloitte survey of 110 biopharma leaders who shared their views on royalty financing:
- More than 55% of surveyed leaders have shown increased interest in royalty funding due to its non-dilutive nature and flexibility compared to equity or debt alternatives.
- Nearly 90% of executives plan to consider royalties for future capital needs in the next three years.
- Up to 75% of executives are likely to integrate royalty funding alongside equity or debt.
- Nearly 80% of leaders are interested in synthetic royalties—contractual rights to future sales in exchange for upfront capital—to help meet funding needs.
- Executives and bankers dismissed concerns that synthetic royalties limit acquisitions or licensing, affirming that these deals preserve strategic flexibility.
Unlocking growth and flexibility with synthetic royalties
Biopharma organizations are driving both financial agility and expansion by leveraging synthetic royalties that give companies immediate capital in exchange for a share of future product revenues—without giving up control or diluting long-term value. Recent deals have quadrupled this segment’s share of the financing market, and more companies are adopting synthetic royalties as a central pillar of their funding strategies.
Biopharma innovation: Royalty funding takes the spotlight
The industry expects royalty funding to grow and play a crucial role in supporting future capital requirements. Synthetic royalties have been gaining traction among biopharma executives in recent years marking a sizable shift. Such evolving perspectives underscore the growing recognition and importance of royalties in meeting the industry’s capital needs.
Royalty funding will always be part of the equation … it will be considered at par with equity in the future.
Biotech CFO
Success stories are driving confidence, pushing royalty funding into the mainstream. Once niche, royalties are quickly becoming a cornerstone of biopharma finance—and a signal of where funding is headed.
Ready to explore more? Discover the full report for insights, case studies, and recommendations.
Reach out to start a conversation
Teresa Leste
Principal | Deloitte Consulting LLP
tleste@deloitte.com
Prateep Menon
Principal | Deloitte Transactions and Business Analytics LLP
pmenon@deloitte.com
Deepak Singla
Senior Manager | Deloitte Consulting LLP
desingla@deloitte.com
Alfredo Sakar
Senior Manager | Deloitte Transactions and Business Analytics LLP
alsakar@deloitte.com
Vaibhav Agrawal
Manager | Deloitte Consulting LLP
vaibhagrawal@deloitte.com
