Preclinical development is one of the most attractive areas for healthcare investing today. This is driven by scientific advances and by changes in market dynamics.

High-throughput screening allows for large numbers of compounds to be tested rapidly, something that was not feasible previously. Additionally, some of the newer tools for analyzing crystalline structure of molecules have meaningfully enhanced researchers’ ability to optimize molecules.

The fact that most large pharma and biotech companies today want to acquire “clinic” ready assets has made preclinical development far more attractive to venture investors because there is a natural path to exit. Additionally, the IPO window has moved earlier, so it is much easier to take late preclinical/early clinical stage companies public. Many large VCs are also very eager to invest in those later stage assets. These changes in the market allow preclinical stage investors to have numerous options for the programs in which they invest.