Partnering & Licensing

In-licensing and out-licensing decisions are important channels for pharmaceutical companies to use in managing their portfolios for growth and balance. In-licensing decisions are often driven by expanding or consolidating a company’s position in a therapy area. Meanwhile, out-licensing decisions are driven more by risk and value trade-offs related to development investment and market access considerations for new products, or by obtaining a performance boost for “tail” mature in-line products.

We support our larger clients by conducting due diligence on in-licensing assets and establishing deal negotiation ranges by identifying “tipping off” and “walkaway” points. We also support emerging innovator companies in out-licensing their assets outright or in developing partnering arrangements with larger companies. Often our support extends to negotiating deal terms and facilitating clients’ partnering decisions. For mature portfolios with extensive tails, we help our clients develop win/win arrangements with partners to out-license or develop profit-sharing arrangements with partners.

We work with clients on these decisions at all stages of asset development and for in-line products.

Our Case Studies

Valuation & Negotiation Strategy to In-Licensing a Developed Asset

The client required a valuation and negotiation strategy to maximize value from an ongoing deal. We developed a valuation framework using a research plan, forecasted revenues and costs for the product, and assessed the key value and risk drivers to arrive at the full range of potential NPV. We developed a negotiation strategy after assessing various deal options to in-license the product and helped the client understand their financial implications.

Valuation & Partnering Strategy for a Phase II Asset in an Orphan Indication

Our client required a valuation of its rare disease asset to support its development and partnering strategy for the US and EU5 markets. We developed a financial model, assessed uncertainties and projected the product’s financial prospects, including risk. Our team provided critical information to support a go/no-go decision and described the financial trade-offs involved in the partnering options for long term value versus immediate payments.

Valuation & Partnering Strategy for a Biosimilar Portfolio in Phase II/III

An Asian client wished to value its biosimilar portfolio, compare different partnership options and obtain guidance on its negotiation strategy in the US and EU. We created and evaluated scenarios containing different levels of competitive aggression, and different regulatory evolution paths. We assessed the value and risk of the scenarios to arrive at their NPVs, establishing a negotiation platform. We developed recommendations for a negotiation strategy to obtain the most value from their western partnership.

Commercial Due Diligence of a $1B Acquisition Strategy

A private equity consortium was concerned about the riskiness of an Australian target company’s portfolio. It especially wanted to understand the value of a key brand and the threat it faced from potential generic entrants and the resulting impact on its valuation. We evaluated several scenarios of generic entry and helped the consortium develop effective strategies for dealing with the threat to value while negotiating a 30% reduction in acquisition cost.