Financing Strategy Of Biopharmaceutical Company Based On Enterprises’Lifecycle

Biopharmaceutical industry is one of the most potential industry in twenty-first century, some countries including China have regarded it as source of strong economic growth. As the R&D has three distinct characters:high investment, high risk and long cycle, biopharmaceutical companies have some difficulty to obtain funding from general channels. Financing difficulty has become a key factor affecting the development of biopharmaceutical companies, lack of funding has become a major bottleneck restricting the development of China’s biopharmaceutical companies. Investigating the financing problems and strategy of biopharmaceutical companies will be a great help to resolve their financing problems and promote the innovation and development of China’s pharmaceutical industry.Biopharmaceutical companies face different risks and have different enterprise value at different stage of enterprise life cycle, so biopharmaceutical companies should take different financing strategy at different stages of life cycle. This article aim to investigate appropriate financing strategy which biopharmaceutical companies should take at different stage of life cycle through the theory of enterprises’lifecycle. Firstly, it propose the division of life cycle for biopharmaceutical enterprise. As drugs are special commodities, the R&D, manufacturing and supplying of drugs are supervised and approved by the drug administration. The approval of clinical or manufacturing means a sharp decline in the risk of R&D and a significant increase of biopharmaceutical companies’ value. Therefore, the life cycle biopharmaceutical companies divided into seed stage, start-up stage, development stage and maturity stage according to the risk and value of the enterprise which is closely combined by the approval of drugs by the drug administration. Then detailed analyze the financing channels at each stage, the advantages and disadvantages of different financing strategies at different stage of life cycle.A biopharmaceutical company in life cycle of development stage is taken as an example, Firstly introduce A company’s profile and financing channels which A company has taken at different stages of life cycle. Then the current status of A company is focused on. It introduce A company’s capital needs, financing gap, financing environment and try to solve the difficulty A company meets and come to the conclusion that taking the IPO road is the best choice for A company. Then analyze five forces model for IPO and the risk, financial situation and IPO board selection for A company is growth enterprise board.At last it comes to an conclusion that biopharmaceutical companies should take appropriate financing strategy at different stage of the lifecycle according to the study of enterprises’ lifecycle. And no matter the stage of life cycle an enterprise at, biopharmaceutical companies should standardize enterprise internal management and strengthen external communication for the preparation of financing, break through the bottleneck of financing, promote the sustainable development. This article aims to financing strategy, making enterprise life cycle as research point, not only intends to solve the problems that A biopharmaceutical company meets, but also to provide some practical help to other biopharmaceutical companies in China.