The worst words in healthcare are “a private equity firm has acquired us.” Private equity firms make money by buying, gutting, and selling companies. Companies bought by private equity firms are far more likely to go bankrupt than companies that aren’t and they are killing patients in the process.
Venture capitalists have poured $42 billion into drug development over the past three years. Most small biotech companies rely on venture capitalist funding to develop new drugs but is that a good way to go? not necessarily. VCs invest money in biotech because they see a potential windfall via a profitable acquisition or sale, but when the FDA weighs in with delays, VCs can be ruthless.