Financing biotechnology projects: lender due diligence requirements and the role of independent technical consultants

An increasing number of biotechnology projects are being brought to commercialization using conventional structured finance sources, which have traditionally only been available to proven technologies and primary industries. Attracting and securing competitive cost financing from mainstream lenders, however, will require the sponsor of a new technology or process to undergo a greater level of due diligence. The specific areas and intensity of investigation, which are typically required by lenders in order to secure long-term financing for biotechnology-based manufacturing systems, is reviewed. The processes for evaluating the adequacy of prior laboratory testing and pilot plant demonstrations is discussed. Particular emphasis is given to scale-up considerations and the ability of the proposed facility design to accommodate significant modifications, in the event that scale-up problems are encountered.