Insight journal - Deals and alliances

Discovery, Preclinical and Clinical Stage – recent trends in pharma and biotech partnering 2009 to 2014

Posted on 24 June 2014

Tags: , , , ,

Discovery, preclinical and clinical stage pharma and biotech partnering forms a critical part of the drug candidate commercialization process.

This is where smaller companies that have developed candidate drugs to a stage that requires an injection of funds and/or expertise to ensure it progresses smoothly through clinical development, commence partnerships with larger companies who can bring funds and expertise into the process.

A biopharma discovery stage partnering deal is where a licensor partners with a licensee company to complete discovery stage development, followed by clinical stage and then product registration and launch, subject to the successful completion of each phase of development.

A new analysis by Current Partnering has revealed recent trends in pharma and biotech partnering at discovery to clinical stage of development– including average deal financials.

The article is an abstract from the reports: 

Discovery Stage Partnering Terms and Agreements in Pharma and Biotech

Preclinical Stage Partnering Terms and Agreements in Pharma and Biotech

Clinical Stage Partnering Terms and Agreements in Pharma and Biotech

Analysis of data provided by Current Agreements, the leading life sciences deals and alliances database, shows that discovery stage pharma and biotech partnering makes up about 35%, preclinical 22% and clinical stage accounting for 19%  of all deals where a stage of development is disclosed since 2009.

 Partnering in the initial stages of development of a compound is crucial for small biopharma (licensor) companies looking for investment to progress development of a drug candidate, whilst for larger companies (licensees) it provides an opportunity to build or plug product pipelines with promising new candidates.

The licensee generally takes overriding control of the continuing preclinical and clinical development, although the activity may be governed by a joint development committee made up of representatives from each company, with the licensor funded to complete some or all of the future activities.

The following figure shows the breakdown in biopharma discovery to clinical stage deal making between 2009 and mid May 2014.

Figure 1: Number of pharma and biotech partnering deals signed at discovery to clinical stage of development 2009-2014

discovery-clinical stage

 

 

 

 

 

 

 

 

Source: Current Agreements, 2014

Licensors reasons for entering discovery, preclinical and clinical stage deals by pharma and biotech partnering

There are numerous reasons for the licensor company entering into discovery, preclinical and clinical stage deals:

  • Licensor unable to afford costs of further development
  • Licensor lacks the expertise or capacity to efficiently progress next clinical studies
  • Licensor seeking third party expertise to position clinical studies for maximum market opportunity and/or maximum chances of success with viable endpoint
  • Need to secure additional revenue streams for existing or new activities, or to reward investors unwilling to wait for commercialization
  • Alternative revenue stream to equity, bank or flotation routes when these routes are difficult to access
  • Licensor wishing to explore new therapeutic opportunities
  • Hedge against risk of clinical failure whereby value of asset may reduce to zero rapidly
  • Positioning to maximize market opportunity assuming successful clinical development
  • Expand market opportunity into additional territories
  • Co-promote to maximize market penetration in shortest possible time
  • Allow third party to exploit additional therapeutic opportunities outside core interest
  • A previous merger/acquisition has forced asset disposal
  • Access to quids in terms of training, marketing experience, products
  • Endorsement of product or technology to satisfy investors

The following figure provides a summary of upfront payment data analyzed in this report.

Figure 2: Median upfront payments for discovery, preclinical and clinical stage deals, US$m

upfront payment

 

 

 

 

 

Source: Discovery Stage Partnering Terms and Agreements in Pharma and BiotechPreclinical Stage Partnering Terms and Agreements in Pharma and BiotechClinical Stage Partnering Terms and Agreements in Pharma and Biotech

Figure 3: Median royalty rates for discovery, preclinical and clinical stage deals, %

median royalty

 

 

 

 

 

Source: Discovery Stage Partnering Terms and Agreements in Pharma and BiotechPreclinical Stage Partnering Terms and Agreements in Pharma and BiotechClinical Stage Partnering Terms and Agreements in Pharma and Biotech

It is likely that pharma and biotech partnering will continue to dominate the discovery, preclinical and clinical development of biopharmaceuticals in the foreseeable future. While the licensors will continue to demand return for access to new drug candidates and also seek to extend involvement into product launch, marketing and promotion, licensees are likely to increasingly resist the demand for high upfront or licensing fees.

The reports Discovery Stage Partnering Terms and Agreements in Pharma and BiotechPreclinical Stage Partnering Terms and Agreements in Pharma and BiotechClinical Stage Partnering Terms and Agreements in Pharma and Biotech  provide a detailed and comprehensive analysis of discovery, preclinical and clinical stage partnering deals, providing access to in-depth data on deal financials including median deal terms, payment term spread, access to each financial deal term data point available, and access to over 7,400 discovery to clinical stage partnering deals as announced between 2009 and January 2014, including contract documents where available.

Sources

The above information has been abstracted from the following resources:

 

Related

View: glossary definition for discovery stage partnering

View: glossary definition for preclinical stage partnering

View: glossary definition for clinical stage partnering

View: Current Partnering’s Partnering Scorecard – view top life science partnering deals by value

View: Current Partnering’s Deal Metrics – the latest deal trend infographics for life science deal making

View: Current Partnering’s Big Pharma Deal Making Scorecard – latest trends in big pharma deal making activity

Signup: Current Partnering Dealmakers Update – weekly newsletter providing the latest life science industry deal news, deal making trends, partnering events – sign up now

Signup: Current Agreements Deals Review – monthly newsletter – reviewing the previous month’s life science deal making – partnering, M&A and financing – sign up now

Subscribe: Current Agreements life sciences partnering, M&A and financing deals database – find out more

Follow us on: LinkedIn Current Partnering | LinkedIn Business Development Network | @Currentpartner on Twitter

 

 

Print Friendly, PDF & Email

Leave a Reply