The creative financings that Cowen Royalty provides have several benefits to companies. Traditional passive royalty and Synthetic Royalty® financings are non-dilutive, which allows companies to access capital to grow their businesses without diluting the stakes of current shareholders. Additionally, the financing is typically completed in a single-party transaction, which expedites timing and limits deal and process complexities. The absence of restrictive debt covenants in traditional passive royalty and Synthetic Royalty® financings allows companies to maintain operating and managerial flexibility. For many public companies, the capital markets attribute little or no value to existing royalty streams and a monetization can unlock that value. The cash can then be used to finance a product acquisition, commercial infrastructure expansion, new development opportunity or other strategic initiative.
This unique financing model helps reduce the future risk associated with the product and provides companies immediate liquidity. Royalty-based financing also allows a company to benefit from a product’s potential today regardless of its eventual commercial performance.