Options: Is the Bio/Pharma Industry Becoming More Risk Averse?

In deal-making, options have long been considered a useful vehicle to carry uncertainty through to a point of resolution, or at least to a position of more understandable risk. Many very early stage players prefer the use of options to allow partners an opportunity to uncover value rather than undersell or worse allow good potential to gather dust for lack of resource. Would-be licensees see options as a lower risk / lower cost way of securing assets, seeing the risk reward balance falling in favour of watchful waiting. The pharmaceutical pipeline is a risky environment.

Co-promotion Deals - Panacea or Poison Pill?

The incidence of co-promotion components in biotechnology/pharmaceutical licensing deals for development products has grown steadily since 1996 according to data from PharmaDeals© V4. In 1996 just 6% of licensing deals retained co-promotion rights or options for licensors, to date in 2010 the frequency is double that (12%). We were interested to uncover if these agreements converted into commercial realities and if so did they turn out to be mutual successes for the concerned parties.

Pharmaceutical Royalties in Licensing Deals: No Place for the 25% Rule of Thumb

The 25% rule of thumb is often quoted in the context of licensing deals royalty rates and in particular when deriving an appropriate rate of income due to a licensor for an innovative intellectual property asset. We have set out to conduct an in-depth analysis of historic market data from the pharmaceutical industry going back over ten years to check on the validity of this concept and found little if any evidence of its use, appropriateness or relevance.

Trends in the World Small Molecule API Manufacturing M&A Market

The pharmaceutical small molecule API manufacturing industry is now experiencing a period of rapid change. This change is being driven by factors such as the changing nature of the drugs being made, expiry of patents covering the top-selling pharmaceuticals, the growth of the API manufacturing industry in India, China and Asia, shrinking margins causing downward pressure on pricing and the drive by governments to cut spending on drugs. This paper takes a look at how these trends are helping shape mergers and acquisitions (M&A) activity within this dynamic sector.

The Strategic Importance of Biomarkers to the Pharmaceutical Industry

In the last few years, pharmaceutical companies have become increasingly interested in biomarkers and their incorporation into company drug development programmes and use as companion tests for targeted therapeutics. Identifying patients that will benefit from a drug and eliminating those that will not is increasingly important.

Understanding Headline Deal Values A PharmaVentures Guide to the Interpretation of Deal Terms and Terminology

Deal making is the lifeblood of the pharmaceutical sector. In- and out-licensing and other types of agreements are key mechanisms by which intellectual property (IP) of innovative products and technologies is transferred between companies for achievement of development and commercialisation objectives. It is vital that companies execute good deals as this underpins their future profitability, drives share price and demonstrates management competency.

Deal-making Metrics - Quantitative Trends in Partnering Transactions

The life sciences industry has never seen such an intensity of deal-making, especially that of licensing, than in the past six years. Some of the reasons for this are quite evident: growing pharmaceutical companies have greater pipeline needs, a spate of patent expiries threatens future revenues and research and development (R&D) externalisation has become central to the innovation strategies of cash-rich companies.

Synergy or Vanity: the Appetite for Pharma Mega-Mergers

The late 1990s and early years of the current decade saw a number of mega-mergers between companies, which defined the current shape of the pharmaceutical industry, and have established a hierarchy of companies commonly referred to as `big pharma'. In recent years, however, there have been no mega-mergers, suggesting that the industry might have lost its appetite for such deals. The publicly explained rationale for these mergers might differ between transactions, 

Finding and Executing Pharma Licensing Opportunities

It is not surprising that mostly small to medium sized companies seek the help of specialist consultancies to find commercial partners or find in-licensing opportunities. Large pharma are in the attractive position that they get thousands of unsolicited pharma licensing offers from small R&D companies every year and they have ample capacity to conduct due diligence on the promising candidates and partners.

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