What’s more, having the credit line in its back pocket has given Exelixis more strength at the bargaining table when it comes to seeking other investment. “The best position to be in is one of indifference,” says Karbe. “When you are strapped for cash, you are negotiating out of weakness.” The message for other companies, Karbe says, is “start your negotiations early before you really need the money.”
Some companies, however, may be forced to change their business plans to get cash, says financing expert Jerome Engel, executive director at the Lester Center for Entrepreneurship and Innovation at U.C. Berkeley’s Haas School of Business. “The therapeutic model requires such momentum in the financing space,” says Engel. “There is going to more emphasis on process technologies where the business development cycles are shorter.” Changing a focus to process technologies from therapeutics is surely a radical change, but in difficult times, exploring all the options is never a bad idea.