Out-licensing Partnership

Establish an out-licensing and development partnership agreement for a Phase 2B compound

Situation

An emerging biotechnology company sought to out-license a new compound that had completed a Phase 2B clinical study.  The phase 2B study results demonstrated its safety and efficacy, but did not distinguish the compound from generic and widely used drugs.  It indicated some “signs” of potentially positive effects on specific sub-indication and a Mechanism of Action that was not completely clear. The market for this compound was mostly generic, with great unmet need. Global pharmaceutical companies in this market seek drugs that demonstrate major advantages over generic options. These market and compound attributes made it challenging to generate partnership interest among global pharmaceutical companies.

Challenge

To enter a competitive marketplace without a distinguishing edge, we needed to develop a winning commercialization strategy, including a carefully constructed profile of a potential partner.  The goal was to take this “ordinary compound”, make it stand out and partner it.

Action Taken

We drafted and executed a detailed commercialization strategy including the selection of an outstanding partner profile. Given the competitiveness of the marketplace and the compound attributes, the success of this strategy, relied on experience, diligence, creative and out-of-the-box thinking, negotiation expertise and a strong reputation and network in the field.

Results

A successful out-licensing agreement was signed with a partner who committed to further develop and commercialize the drug. The deal terms include: a multi-million dollar upfront payment; multiple development and sales based milestone payments; and a high two-digit, royalty rate.  The total deal value was in the hundreds of millions of dollars.