The National Cancer Institute claims there were an estimated 1,735,350 new cases of cancer diagnosed last year in the US. In the race to cure and stop cancer from devastating more lives, Agenus has launched the first asset-backed digital security.
The digital security will allow for a faster financing vehicle and help more targeted investments by qualified investors in the development of therapeutic products. The investor will be issued a token which will represent a portion of potential future US sales.
Block Tribune spoke with Jeff Ramson, founder & CEO of PCG Advisory Group, about the ramifications to the pharmaceutical industry.
BLOCK TRIBUNE: How big a challenge is financing in the pharmaceutical industry? Aren’t most drugs produced by multinational corporations?
JEFF RAMSON: Most drugs are produced by multinationals – that is correct. But most drugs are discovered and moved through early clinical trials by much smaller biotech companies. It is a huge challenge to finance these trials, as most of these biotechs are solely dependent on equity investors, as they have very little, if any, revenue from approved products.
BLOCK TRIBUNE: Walk me through how the token process works. An investor buys a token – what happens next?
JEFF RAMSON: There is a 12-month holding period before the token can be traded on an exchange. I believe there is a four-month hold before it can be sold to another accredited investor. This particular token, I believe, derives its value from a percentage of future sales of the drug. There is still a period of time to complete the phase 3 trial, and if approved, prepare for commercialization.
BLOCK TRIBUNE: Isn’t marketing a big part of drug acceptance? How will that be accounted for?
JEFF RAMSON: I believe, in general, that is part of the anticipated use of proceeds for this type of token offering. It is to complete the trials, and to commercialize the drug, which includes significant marketing costs.
BLOCK TRIBUNE: How will the issuing company make money?
JEFF RAMSON: The company issuing the token makes money from sales of the drug. It shares a percentage with the token holders, and after a certain return has been paid, the rights to that revenue fully revert to the parent company.
BLOCK TRIBUNE: How much do you anticipate this funding mechanism will speed up the process of bringing drugs to market?
JEFF RAMSON: I think that once the tokenization concept is more widely accepted, and there are regulated exchanges which validate the path to liquidity, smaller biotech companies will be able to raise money much faster – I would think they will save years potentially.
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