Goldman Sachs is in talks to provide hundreds of millions of dollars of funding to a large pharmaceutical company, according to the Financial Times.

The newspaper notes that the proposed deal is the first example of a new business model which will see financing move from funding companies towards targeted co-development of specific drugs. The proposal was disclosed by Jon Symonds, a managing director at Goldman and ex-chief officer of AstraZeneca, at the FT Pharmaceutical conference in London.

Announcing the plan, Mr Symonds said that large drugmakers were “trapped in their pipelines” by substantial commitments to costly Phase III trials, with only limited funds for earlier stage medicines. “There is a genuine shortage of capital,” he said.

The Goldman model will create a “research pool” into which pharmaceutical companies would place a range of experimental drugs in a single therapeutic area in early-stage Phase I and II trials. Then, their researchers would work with external experts including scientists, chemists and clinical research organisations.

This approach would help create more flexible, transparent and cheaper drug development, Mr Symonds argues, cutting down on bureaucracy and overheads. It would also result in risk-sharing for new drug development with outside partners.

He added that the model would allow other drugmakers working on similar treatments, and duplicating research areas, to pool their resources. “If we deliver one, there is huge appetite because capital is in pretty short supply,” Mr Symonds told the FT.