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Pharmaceutical Licensing Strategies: Best Practices In Deal-making, Valuations And Strategic Management

Business Insights
June 1, 2006
116 Pages - SKU: RET1315618

Abstract Table of Contents Search inside this report Related Reports

With falling R&D productivity and continued healthcare cost containment and generic competition pushing down the returns available for successfully launched products, only those companies able to complement internal efforts with a strong partnering strategy will be able to remain competitive over the next five-to-ten years. Pharmaceutical licensing strategies: Best practices in deal-making, valuations and strategic management provides a detailed analysis of licensing strategies in the pharmaceutical and biotechnology industries. The report draws upon deal-making trend data, primary research survey results and a profile of best practices in pharmaceutical licensing in order to present a set of actionable recommendations for optimizing deal-making.

Key findings of the report:

The larger biotech companies now have the resources and the capabilities to develop lead drugs to later stages of development before seeking a pharmaceutical partner, and are now able to compete with pharmaceutical companies for the best in-licensing deals from emerging biotech.
While the value of licensing deals has risen markedly in the last 5 years, the volume of deals among the top companies has plateaued. Companies are increasingly seeking out long-term, multi-product, multi-indication collaborations rather than one-off transactional deals.
Using independent and unbiased model inputs in the licensing valuation process limits areas of subjective disagreement, and allows deal terms to be maximized for both parties.
A successful deal cannot only be judged by deal terms and revenues gained from the eventual product; the quality of the relationship between licensing partners is also equally important.

Key questions answered in this report:

What are the best practice strategies in developing an effective win-win licensing deal?
How does the licensing process differ for in-licensing and out-licensing companies?
How do outside agencies, consultancies and investors help to support the licensing process?
What can be done to optimize licensing deal values through collaborative evaluations?
What lessons can be drawn from the key successful deals and deal-makers of the past 10 years?
How is the value, volume and competition for licensing deals forecast to change over the coming year?
Why are companies now forming more relationship-based licenses than ever before?

Additional Information

Top five reasons to order your copy today:

Understand how the dynamics of licensing deals have changed in the last 5 years, including the increasing complexity of multiple development compound deals and the shifting balance of power between the licensee and licensor.
Gain access to a survey of over 140 licensing experts ensuring you implement optimal licensing processes and commit adequate resources to support deal-making.
Profile the leading deals and deal-makers over the past 5 years, identify the key factors of success and apply the report’s actionable recommendations.
Implement effective alliance management processes to ensure the success of your current licensing deals and become the partner of choice for the future.
Apply the independent licensing valuation model presented in this report in order to begin more collaborative licensing negotiations and maximize the value of your deal for both parties.

Executive Summary: Introducing pharmaceutical licensing; Licensing trends; Licensing process; Licensing valuations; Licensing best practices
Chapter 1 Introducing pharmaceutical licensing: Summary; Introduction; The age of the partnership; Definitions; Report outline
Chapter 2 Licensing trends: Summary; Introduction; Headline deal trends; Licensing deal partners; Licensing deal types; Licensing deal subjects
Chapter 3 Licensing process: Summary; Introduction; A complex process; In-licensing versus out-licensing; Licensing strategy; Opportunity identification; Licensing evaluations; Deal-making and agreement; Post-deal management and analysis; Using outside agencies
Chapter 4 Licensing valuations: Summary; Introduction; Valuing deals; Current best practices; Deal-making valuation model
Chapter 5 Licensing best practices: Summary; Introduction; Top licensing deals of the 21st century; Preferred licensing partners; Recommendations for the future
Chapter 6 Appendix: Primary research survey; Sources; Index
List of Figures: Figure 2.1: Number and average value of top 10 pharmaceutical company licensing deals, 2001- 2005; Figure 2.2: Expected change in number of licensing deals during 2006; Figure 2.3: Expected change in average value of licensing deals during 2006; Figure 2.4: Number of top 10 pharmaceutical company licensing deals by partner, 2001-2005; Figure 2.5: Number of top 10 biotech company licensing deals by partner, 2001-2005; Figure 2.6: Number of biotech out-licensing deals by partner, 2001-2005; Figure 2.7: Number of top 10 pharmaceutical company licensing deals by deal type, 2001-2005; Figure 2.8: Number of top 10 biotech company licensing deals by deal type, 2001-2005; Figure 2.9: Proportion of product-based licensing deals by therapy area, 2001-2005; Figure 2.10: Number of product-based licensing deals by therapy area, 2001-2005; Figure 2.11: Number of R&D licensing deals by development stage, 2001-2005; Figure 2.12: Number of biotech R&D licensing deals by development stage, 2001-2005; Figure 3.13: Expected change in number of potential partners chasing each licensing deal during 2006; Figure 3.14: Expected change in the length of time required to complete a licensing deal during 2006; Figure 3.15: The pharmaceutical licensing process; Figure 3.16: Parties involved in identifying potential licensing opportunities, 2006; Figure 3.17: Parties involved in conducting due diligence for potential licensing opportunities, 2006; Figure 3.18: Parties involved in the valuation and negotiation of potential licensing deals, 2006; Figure 4.19: Information shared between partners during licensing negotiations, 2006; Figure 4.20: Valuation techniques used in determining optimal licensing deal terms, 2006; Figure 4.21: R&D costs by phase, 2000; Figure 4.22: R&D lead times by phase, 2000; Figure 4.23: R&D success probabilities by phase, 2000; Figure 4.24: Drug market diffusion curve - product lifecycle; Figure 4.25: Likelihood of outcomes for new phase I, phase II and phase III drugs; Figure 4.26: Expected real values (non-discounted) for new phase I, phase II and phase III drugs; Figure 4.27: Discounted expected real values for new phase I, phase II and phase III drugs; Figure 4.28: Discounted expected real values for new phase I, phase II and phase III drugs (adjusted for lower R&D cost inflation); Figure 4.29: Deal outcomes for out-licensor; Figure 4.30: Deal outcomes for in-licensor; Figure 4.31: Share of expected deal outcomes by partner; Figure 4.32: R&D costs by phase by therapy area, 2000; Figure 4.33: R&D lead times by phase by therapy area, 2000; Figure 4.34: R&D success probabilities by phase by therapy area, 2000; Figure 4.35: Peak sales and year of peak sales by therapy area, 2000; Figure 4.36: Discounted value of sales by therapy area, 2000; Figure 5.37: In-licensing partner of choice, 2006; Figure 5.38: Business development and licensing department, Novartis; Figure 5.39: Licensing process at Novartis; Figure 5.40: Out-licensing partner of choice, 2006; Figure 6.41: Licensing trends survey respondents by company focus; Figure 6.42: Licensing trends survey respondents by functional responsibility; Figure 6.43: Licensing trends survey respondents by licensing responsibility
List of Tables: Table 4.1: R&D cost by phase and peak sales, 2006 (expressed in 2006 dollars)

Pharmaceutical Licensing Strategies: Best Practices In Deal-making, Valuations And Strategic Management

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