BIO 2025: Investment Limiting Effect of the Capability Gap

In this BIO 2025 interview, The Pharma Navigator looks at the investment landscape for drug development and how political decisions have an impact on investments with Ali Pashazadeh from Treehill Partners in greater detail.

A vast majority of drug development companies are “uninvestable” asserts Ali Pashazadeh, Founder, Chairman, and CEO of Treehill Partners — an international strategic and financial advisory company — when discussing the current state of the investment landscape for the sector. “[This uninvestability] is not because the companies don’t have great molecules or great science,” he adds, “it is that they have a capabilities gap.”

Over recent years, the past four to five, companies have been required to streamline operations — reducing staffing or relying on fractional team members, for example — as financial support has not been forthcoming, Pashazadeh remarks. “Now, we’re at a point where an investor looks at a company and they say, ‘I like your molecule, I want to give you the money, do you have the team that can take that and move it forward?’ And, in about 70% of cases, the management capabilities aren’t there,” he says.

Additionally, there is a disconnect between what biopharma/biotech companies need to do to get investment and what investors are willing to do to provide funding, Pashazadeh notes. “The other thing here is, there’s no huge penalty for sitting on cash,” he says. So, investors are sitting on cash and various stakeholders, such as CROs, are becoming frustrated as no deals are happening and clinical studies are not taking place.

When looking at the political shifts that have been seen this year, Pashazadeh specifies that there may be opportunities to improve efficiencies and remove red tape with new administrations in charge; however, the potential impact of these changes cannot be quantified from an investment perspective. “Let’s have a disruptive period that allows us to improve from that,” he states.

Click the video above to view the full interview

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