The healthcare and medical technology sector presents what may be the starkest disconnect between asset value and asset recognition in any industry. A MedTech company that has invested £30 million over eight years to develop a Class III medical device — designing the product, running clinical trials, navigating regulatory pathways, building clinical evidence — may have tangible assets of £5 million. The remaining £25 million of investment has created intangible assets — patents, clinical data, regulatory approvals, physician relationships — that are invisible on the balance sheet but are the source of virtually all future revenue.
For PE firms that are among the most active investors in healthcare, this imbalance is both familiar and frustrating. They pay enterprise values that reflect the true intangible asset base, but their debt financing is constrained by the tangible asset base that lenders can see.
Healthcare companies routinely invest multiples of their tangible asset base in intangible assets — patents, clinical evidence, regulatory approvals — yet their borrowing capacity reflects only the tangible fraction. Structured intangible collateral can close this gap.
Healthcare and MedTech intangible assets form a hierarchy where each layer builds on the one below it, and the combined value significantly exceeds the sum of the parts.
Device and therapeutic patents. At the foundation are the patents that protect the core innovation. In MedTech, patent portfolios can be extensive — a single device may be protected by dozens of patents covering the mechanism, materials, manufacturing process, software, and method of use. These patents create a defined period of market protection and constitute the most conventional form of IP collateral.
Regulatory approvals and clinical evidence. Above the patent layer sits the regulatory asset: the CE marking in Europe, FDA 510(k) clearance or PMA approval in the US, and equivalent authorisations in other jurisdictions. These approvals are backed by substantial clinical evidence packages — randomised controlled trials, post-market surveillance data, real-world evidence studies — that took years and millions to accumulate. The regulatory approval plus its supporting clinical evidence constitutes an integrated intangible asset of enormous commercial value. A competitor may be able to design around a patent, but replicating a clinical evidence package that supports a regulatory approval is a multi-year, multi-million-pound undertaking.
A competitor may reverse-engineer a device design, but replicating the randomised controlled trials, post-market surveillance data, and real-world evidence studies that underpin a CE marking or FDA PMA approval is a multi-year, multi-million-pound undertaking — making regulatory assets one of the most defensible forms of intangible collateral.
Clinical relationships and Key Opinion Leader networks. Healthcare products are adopted through a relationship-intensive process involving clinicians, hospital procurement committees, and healthcare system administrators. The relationships that a MedTech company builds with Key Opinion Leaders (KOLs), clinical champions, and institutional buyers represent a durable intangible asset. These relationships influence adoption, support clinical evidence development, and create switching costs.
Health data assets. MedTech companies — particularly those operating connected devices, digital therapeutics, or remote monitoring platforms — accumulate proprietary health data that has value beyond the immediate product. Registry data, outcomes data, device performance data, and patient-reported outcome measures create an evidence base that strengthens regulatory positioning, informs product development, and can generate standalone commercial value through data licensing or real-world evidence services.
Training and support infrastructure. The clinical training programmes, surgical education platforms, and technical support systems that surround complex medical devices constitute operational intangible assets. They embed the product within clinical workflows, create switching costs, and generate additional revenue streams.
| Layer | Asset Class | Collateral Characteristics |
|---|---|---|
| Foundation | Device & therapeutic patents | Registered, transferable, defined term |
| Regulatory | CE markings, FDA approvals, clinical evidence | Multi-year replication barrier, integrated value |
| Relationship | KOL networks, clinical champions | Switching costs, adoption influence |
| Data | Health data, registry data, outcomes data | Appreciating asset, licensing potential |
| Operational | Training programmes, support systems | Workflow embedding, revenue generation |
The lending structures for healthcare and MedTech draw on the same principles as other intangible-intensive sectors but require adaptations for the regulatory environment.
Patent portfolio-backed facilities. A MedTech company's patent portfolio — particularly one covering a marketed device with established revenue — can support a facility where the patents are pledged through an IP holdco structure. The challenge in healthcare is ensuring that the regulatory approvals, which are often linked to the patent holder, are not disrupted by the security structure. Careful legal structuring can achieve this, with the IP holdco holding the patents and licensing them to the operating entity that holds the regulatory approvals.
Regulatory asset-enhanced lending. While regulatory approvals cannot always be cleanly pledged as standalone collateral (they are typically held by a specific legal entity and transfer requires regulatory consent), they can significantly enhance a lending structure by providing additional security value. A lender with recourse to both the patent portfolio and the associated regulatory approvals has a collateral package that is substantially more valuable than either component alone.
Regulatory approvals are typically held by a specific legal entity and their transfer requires regulatory consent. They cannot always be cleanly pledged as standalone collateral — but they can significantly enhance a lending structure by providing additional security value alongside patent portfolios.
Clinical evidence monetisation facilities. For companies with strong clinical evidence bases, the evidence itself — the clinical trial databases, the real-world evidence datasets, the registry data — can be valued as an intangible asset and incorporated into a collateral package. The lending facility recognises that this evidence base would take a competitor years and significant investment to replicate, providing a durable competitive moat that supports the loan.
Outcomes-based structured facilities. A forward-looking structure where the facility terms are linked to clinical outcomes data. As the company generates positive outcomes evidence, the facility terms improve — higher advance rates, lower margins — reflecting the increasing value of the evidence base. This aligns lender and borrower incentives around the most commercially significant intangible asset in healthcare: proof that the product works.
Healthcare is one of the largest PE sectors globally, with firms acquiring everything from medical device manufacturers to healthcare IT companies to clinical services businesses. The sector's defensive characteristics, demographic tailwinds, and innovation dynamics make it structurally attractive.
But PE healthcare financing is constrained. The intangible-intensive nature of healthcare businesses means that conventional leveraged lending typically supports lower leverage than in tangible-asset-rich sectors. The difference can be two or three turns of EBITDA — a material impact on equity returns.
Intangible asset-backed lending can close part of this gap. A PE firm that can present a lender with an independently valued intangible asset base — comprising identified patents, quantified regulatory asset value, and assessed clinical evidence worth — is offering a fundamentally different lending proposition than one that offers only enterprise value and EBITDA covenants.
The practical benefit extends to portfolio management. A PE-backed MedTech platform pursuing a consolidation strategy can structure its acquisition financing around the intangible assets of each target, building a diversified collateral pool that supports increasing leverage as the platform grows. Each acquisition adds patents, regulatory approvals, and clinical evidence to the pool.
Healthcare has been slow to adopt intangible asset-backed financing, partly because the regulatory complexity creates perceived barriers and partly because the lending market has lacked the sector expertise to assess healthcare intangible assets. Both barriers are surmountable.
At Opagio, we work with healthcare companies and their PE sponsors to identify, value, and structure the intangible assets that define value in this sector. The healthcare industry's rigorous approach to evidence and regulation actually makes its intangible assets more identifiable and defensible than those in many other sectors. A CE-marked device with a robust clinical evidence package is, by definition, an asset that has been scrutinised, validated, and registered — characteristics that should make it attractive rather than challenging as collateral.
The structured finance toolkit is ready. The healthcare intangible assets are there. The healthcare industry's rigorous approach to evidence and regulation actually makes its intangible assets more identifiable and defensible than those in many other sectors — making them ideal candidates for structured collateral. Value your healthcare intangible assets or get in touch to explore structured lending options.
Tony Hillier is co-founder of Opagio. He holds an MA from Balliol College, Oxford and an MBA with distinction. Tony held executive board positions at NM Rothschild & Sons and GEC Finance, and a non-executive directorship at Financial Security Assurance in New York, where he specialised in structured finance, asset-backed securities, and cross-border tax-leveraged leasing.
Pharmaceuticals were among the first sectors to pioneer IP-backed financing through patent royalty securitisations. But the opportunity extends far beyond royalty streams. Drug patents, clinical data packages, regulatory approvals, and formulation know-how constitute a rich intangible asset base that most PE-backed pharma companies underexploit as collateral.
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