Risk-Averse Pharma Companies Get Creative to Invest in New Drugs

The pharmaceutical industry is poised to see a record number of deals in 2021 thanks in part to innovative agreements that aim to facilitate the development of new products, industry watchers say.

Companies like AstraZeneca plc and Bayer AG are engaging in transactions in which they make up-front payments to smaller players, followed by milestone payments upon the smaller company reaching certain goals. Milestone deals are among the ways investors are looking to enter the biopharma space in 2021, with products like Covid-19 treatments and vaccines underway.

These deals can be particularly fruitful for the industry because the amount of ...