Partnering and out-licensing are central to the growth of life sciences companies, especially for emerging pharmaceutical and biotech firms. Within the spectrum that spans from in-house asset development to outright asset acquisition, partnering and licensing hold an intermediate position, and thus provide the advantage of sharing risks and rewards, thereby maximizing value on a risk-adjusted basis.
There are several strategies to speed up the licensing efforts of biotech companies, but for the majority of small biotech, pharma and diagnostics companies, the conventional approach has been to look towards large, well-established corporations – the “usual suspects”, for partnering their assets. However, data and evidence bring forth several challenges associated with this approach:
- The pool of the “usual suspects” is limited in size, leading to intense competition for their attention.
- The larger entities engage in a relatively modest number of deals, which further narrows opportunities for smaller players.
- The asset attribute requirements put forth by the “usual suspects” for licensing and partnering are considerably high, often creating high hurdles for emerging biotech companies.
As a result, for a biotech company, the probability of successfully securing a partnering deal with these well-established companies is typically low. This circumstance has prompted numerous emerging biotech companies to embrace an alternative strategy—pursuing different segments and tiers of companies. Several reasons support this approach:
- One of the primary reasons is the significant presence of companies that are considered ‘non-usual suspects’. Hence, for a partner-seeking biotech company, it becomes crucial to have a thorough understanding of the competitive landscape involving market players. This understanding substantially enhances the likelihood of successfully finalizing a deal.
- Additionally, it’s worth noting that the valuation of assets and the terms of deals presented by companies in the ‘non-usual suspects’ group are not materially distinct from those offered by the ‘usual suspects’ group of companies.
BiopharmaVantage specializes in providing premium quality but cost-effective licensing and partnering and related services to pharma and biotech companies. If you would like to explore how we can assist, then please contact us.