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Published by: Business Insights
Published: Aug. 1, 2002 - 210 Pages
Table of Contents
Executive Summary
The Licensing Era
Licensing Trends
Implementing Strategic Objectives
Sophisticated Deal-Making
Creating Effective Partnerships
Licensing Strategy
Chapter 1 The Licensing Era
Summary
Introduction
Industry trends
Structural changes to the value chain
Biotechnology
Drug delivery
Genomics
M&A activity
Globalization
A widening expectations gap
Partnership and collaboration
Key drivers of licensing activity for integrated pharmaceutical companies
Plugging the R&D productivity gap
Accessing new technologies and expertise
Building critical mass
Key drivers of licensing activity for specialist technology companies
Generating financial returns
Accessing development and marketing experience
Building critical mass
Chapter 2 Licensing Trends
Summary
Introduction
The impact of licensing
Growth in licensing activity
Key licensing trends
Value and importance of licensing
Competition for partnering
Results of licensing
Earned licensing revenues
Product launches through licensing
Marketed licensed products
The evolution of strategic licensing
Traditional licensing
Leading licensing agreements
Eli Lilly/Genentech (Humulin) - 1978
Kirin/Amgen (erythropoietin) - 1984
Glaxo/BioChem (3TC) - 1990
Allergan/Ligand (retinoid compounds) - 1992
Lilly/Centocor (Centoxin/ReoPro) - 1992
SmithKline/Human Genome Sciences (gene sequencing) - 1993
Bayer/Millennium (genomic small molecules) - 1998
Innovex/CV Therapeutics (Ranolazine) - 1999
Novartis/Vertex Pharmaceuticals (Kinase targeted drugs) - 2000
Eli Lilly/ISIS (ISIS-3521/metabolic & inflammatory diseases) - 2001
Licensing as a strategic tool
Key future trends in licensing
Implementing strategic objectives
Sophisticated deal-making
Creating effective partnerships
Chapter 3 Implementing Strategic Objectives
Summary
Introduction
Linking licensing to corporate strategy
Accessing new discovery expertise
Building new therapeutic franchises
Creating critical mass to launch a new drug
Establishing new development and marketing expertise
Generating financial funding
Licensing agreement case studies
Novartis/Vertex Pharmaceuticals
Genentech/OSI/Roche
Abbott/Millennium
Roche Diagnostics/deCODE Genetics
Eli Lilly/ISIS Pharmaceuticals
Critical success factors
Licensing as a strategic tool
Choosing the most appropriate tool
Matching strategic objectives
Extending strategic objectives
Generating additional strategic opportunities
Chapter 4 Sophisticated Deal-Making
Summary
Introduction
Optimizing returns through complex deal terms
The deal-making process
Deal structure and terms
Complex deal financing
Measurement frameworks
Traditional net present value
Monte Carlo simulation
Real options
Adjusted present value
Contract theory
Critical success factors
Comprehensive due diligence
Structuring risks, responsibilities and rewards
Financing to spare P&L earnings
Measuring risks and contingencies
Evaluating contract dynamics
Chapter 5 Creating Effective Partnerships
Summary
Introduction
The deal-making organization
Deliberate licensing
Licensing as an organization
Becoming a partner of choice
The partnering organization
Partnership management
Internal and external relationships
Key procedures and interventions
Management commitment
Objectives, priorities and responsibilities
Communication channels
Collaborative decision making
Resolving conflict
Progress and results
Critical success factors
Coordinated licensing strategy
Desirable licensing partner
Internal and external alliances
Structures and procedures
Relationship management skills
Chapter 6 Licensing Strategy
Summary
Introduction
Competing through licensing
Implementing strategic objectives
Sophisticated deal-making
Creating effective partnerships
Company case studies
Pfizer
Licensing strategy
Key agreements
Recent licensing activity
Novartis
Licensing strategy
Key agreements
Recent licensing activity
Takeda
Licensing strategy
Key agreements
Recent licensing activity
Genentech
Licensing strategy
Key agreements
Recent licensing activity
Millennium
Licensing strategy
Key agreements
Recent licensing activity
Effective licensing strategy
Blockbuster
Innovation
Geographical
Consolidation
Expansion
Chapter 7 Appendix
Glossary
Sources list
Index
List of Figures
Figure 1.1: Biotechnology vs. non-biotechnology product launches, 1991—2000
Figure 1.2: Total global sales by drug delivery technology, 1997—1999
Figure 1.3: Aventis SA’s recent M&A history, 1990—2000
Figure 1.4: Global retail sales, 2000—2001
Figure 1.5: R&D productivity levels, 1980—2001
Figure 1.6: Forecast R&D productivity levels, 2000—2050
Figure 1.7: The licensing era - partnership and collaboration
Figure 2.8: Trends in pharmaceutical alliances, 1996—2000
Figure 2.9: Trends in biotechnology alliances, 1996—2000
Figure 2.10: Licensing agreements by development phase, July 2000—June 2001
Figure 2.11: Genomics-related licensing trends, 1997—2000
Figure 2.12: Licensing revenues earned by leading 100 biotechnology companies, 1997—2001
Figure 2.13: Average licensing payments made by top 20 pharmaceutical companies, 1988—2000
Figure 2.14: Joint development and licensing for NME launches, 1998—2000
Figure 2.15: Leading licensed drugs, 1998—2000
Figure 3.16: Novartis/Vertex Pharmaceuticals, May 2000
Figure 3.17: Genentech/OSI/Roche, January 2001
Figure 3.18: Abbott/Millennium, March 2001
Figure 3.19: Roche Diagnostics/deCODE Genetics, June 2001
Figure 3.20: Eli Lilly/ISIS Pharmaceuticals, August 2001
Figure 4.21: Licensing case study - NPV evaluation
Figure 4.22: Licensing case study - ENPV evaluation
Figure 4.23: Licensing case study - Monte Carlo simulation
Figure 4.24: Licensing case study - Real options
Figure 4.25: Overview of the adjusted present value framework
Figure 5.26: Internal and external partnership relationships
List of Tables
Table 1.1: Biotechnology vs. non-biotechnology product launches, 1991—2000
Table 1.2: Total global sales by drug delivery technology, 1997—1999
Table 1.3: Summary results of major genomics collaborations, 2001
Table 1.4: Global retail sales, 2000—2001
Table 1.5: R&D productivity levels, 1980—2001
Table 2.6: Trends in pharmaceutical alliances, 1996—2000
Table 2.7: Trends in biotechnology alliances, 1996—2000
Table 2.8: Average licensing deal values, 2000
Table 2.9: Licensing revenues earned by leading 100 biotechnology companies, 1997—2001
Table 2.10: Average licensing payments made by top 20 pharmaceutical companies, 1988—2000
Table 2.11: Joint development and licensing for NME launches, 1998—2000
Table 2.12: Leading licensed drugs, 1998—2000
Table 2.13: Leading licensed drugs, 2000
Table 2.14: Leading licensing agreements, 1978—2001
Table 6.15: Novartis’s key R&D collaborators, 2001
AbstractSeveral factors have combined to transform the role of licensing in the pharmaceutical industry - the reconfiguration of the value chain, ongoing global consolidation and M&A and plummeting R&D productivity. In response, licensing has moved away from its roots as a transaction for intellectual property rights, emerging as a key value driver. Industry leaders now recognise licensing as a strategic mechanism through which they can achieve their corporate objectives. The Pharmaceutical Licensing Outlook, a new management report from Business Insights, identifies and examines current best practice in licensing. Using a blend of market analysis, case studies and executive interviews, the author provides a comprehensive guide to how best to maximize the returns on licensing activity. Equally valuable for pharmaceutical companies, biotechnology companies and technology providers, this groundbreaking report offers both practical and strategic analysis, including a detailed evaluation of successful deal-making.
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