Dive Brief:

• Arie Belldegrun, the founder of Allogene Therapeutics and Kite Pharma, unveiled a new credit firm Tuesday with $600 million to put to work providing loans to biotechnology, medical device and other life sciences companies.
• Called Symbiotic Capital, the firm pitches itself as a new kind of lender that understands the complexities of life sciences businesses, which may be years away from generating the kind of regular revenue that typically makes loan repayments manageable.
• The new firm is affiliated with Bellco Capital, which was founded by Belldegrun. Along with Kite, which he sold to Gilead Sciences for $11.9 billion, and Allogene, the biotech executive also co-founded the venture firm Vida Ventures and started a real estate company called Breakthrough Properties.

Dive Insight:

While the downturn that gripped biotech last year has eased somewhat, the financial effects are still being felt by smaller drugmakers. Startups continue to have difficulty raising money via venture-backed equity; and with the stock market in upheaval, even public companies have had to consider alternative routes to new funding beyond their usual secondary stock sales.

For example, gene therapy developer Bluebird bio recently raised $175 million via a debt financing deal with Hercules Capital, one of the few lenders to which biotechs typically turn.

"As the cost to research, develop and commercialize innovative therapeutics, devices, tools and other products has increased substantially throughout the sector, credit has become an increasingly important financing tool for established healthcare enterprises,” said Belldegrun, in a statement.

Symbiotic Capital bills itself as “For Science. By Science,” describing the credit agreements it offers as “partnerships.” Already, it says it has originated hundreds of millions of dollars in credit facilities.

In a email, a Symbiotic spokesperson said the firm will typically work with companies that are in the later stages of development or already commercializing products. Some exceptions could involve biotechs with a large pharmaceutical company partnership in place, or with other assets, the spokesperson added.

Symbiotic’s leadership team includes, among others, former Roche CEO and chairman Franz Humer, as well as Toby Cosgrove, the previous CEO of the Cleveland Clinic.

Belldegrun will serve as co-chairman, along with former CEO and chairman of City National Bank Russell Goldsmith. Symbiotic co-founder Himani Bhalla is chief investment officer.