L15 Licensing

Question 1

What is licensing?

Answer 1

• a common type of partnership in pharma/biotech
• granting of permissions to use intellectual property rights under defined conditions
• mutually beneficial arrangement
• often enables parties to achieve a shared goal, which neither party could achieve as effectively alone
• typically involves an upfront payment, milestone payments and royalties
• therapeutic area and stage can both influence deal value
• in 2018 there were 1658 licensing deals in the pharma/biotech sector worth $111B

Question 2

Joint ventures

Answer 2

when two or more parties create a separate company by jointly funding it and managing it while sharing in its profits and losses

often used by companies to gain entry to foreign markets

Question 3

Mergers and Acquisitions

Answer 3

when one company acquires another companies. Acquired company no longer effectively exists and all its assets IP are now owned by the acquiring company

Question 4

Contract research

Answer 4

a fee for service arrangement, one company pays for another to conduct a specific service or piece of research. Any IP generated is typically owned by the company paying for the research.

Question 5

How do you find the right partner to commercialise a discovery? - 6 steps

Answer 5

1. identify lead indication/therapeutic area
2. identify/ensure unmet need
3. identify potential partners
4. pitch opportunity to potential partners
5. negotiate and execute License Agreement
6. actively manage partnership for success

Question 6

Identify unmet need - asthma

Answer 6

• asthma controlled in >90% patients with existing therapeutics
• 5-10% asthmatics who don’t respond to current regimes
• because asthma market is large (~$15B) this subgroup represents significant commercial opportunity

Question 7

Identify potential partners - asthma

Answer 7

see onenote

• expertise
• experience in developing successful drug
• commercial experience
• competitor drugs in similar stage of development
• partnering/licensing experience

Question 8

Pitch opportunity to potential partners

Answer 8

• prepare non-confidential brochure and slide deck
• prepare confidential data package
• setup meetings/contact potential partners
  1. previous interactions
  2. introductions via your network
  3. conferences
  4. email/partnering portals
• put confidentiality agreement in place with interested partners

Question 9

Negotiate and execute License Agreement

Answer 9

see onenote

1. prepare term sheet
2. negotiate term sheet
3. once term sheet is greed, progress to drafting License Agreement
4. negotiate License Agreement
5. Once License Agreement is agreed, proceed to execution

Question 10

Common elements of Term sheets and License Agreement

Answer 10

see onenote

1. who is bringing what to the table
2. who will do what in the partnership
3. field
4. territory
5. license granted
6. financials
7. IP ownership
8. term and termination

Question 11

Actively manage partnership for success

Answer 11

• 70% of partnerships fail due to non-technical reasons

1. cultural differences
2. company objectives
3. leadership
4. integration processes
5. market potential change
6. technology failure
7. technology environment
8. governance structure