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The 25% rule of thumb is often quoted in the context of licensing deals royalty rates and in particular when deriving an appropriate rate of income due to a licensor for an innovative intellectual property asset. We have set out to conduct an in-depth analysis of historic market data from the pharmaceutical industry going back over ten years to check on the validity of this concept and found little if any evidence of its use, appropriateness or relevance. An abundance of anecdotal references and attempts can be found to make deal making data fit this incongruous notion, and which does not have a sufficiently robust foundation to make its utility appropriate in the pharmaceutical and biotechnology sector.
Our conclusion shows that this rule has no suitable place in the arsenal of licensing executives.
The original article:
Journal of Commercial Biotechnology, Vol 16, No 1 (2010)
Pharmaceutical royalties in licensing deals: No place for the 25 per cent rule of thumb
Nigel Borshell, Adrian Dawkes
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With the growing understanding of numerous biologoical processes that are influenced by the 100 trillion microorganisms that make up the microbiome of an individual, there is an increasing number of Biotech and Pharma companies seeking to capitalize on this research to develop therapeutic, microbiome-based agents to treat disease. PharmaVentures’ ‘Bugs as Drugs’ paper highlights important emerging deal as well as identifying some of the key players currently in the space.
Should you be interested in learning more about this subject or PharmaVentures please do not heditate to contact Kate Moore, the lead author.
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Infection control is a crucial part of healthcare service delivery. Patients undergoing surgery need to be protected from infection during and after procedures. Surgical instruments are required to be cleaned and sterilised for re-use. The hospital environment needs to be kept at good levels of hygiene to prevent hospital acquired infections (‘HAIs’). The infection control market includes products from low temperature sterilisers (for sterilising more delicate surgical instruments such as endoscopes) to disinfectant solutions to surgical drapes and gowns (that provide barriers to infection).
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In the 3rd quarter issue of termsheet last year, we predicted a significant increase in pharmaceutical M&A deal values for 2015. In our latest white paper ‘Trends in the CMO Landscape’ we demonstrate the impact this increase in deal values has had on the Pharmaceutical industry and specifically in relation to CMOs and their future. We highlight the challenges facing the leading players and what strategies they are employing to address these in an increasingly competitive and fragmented sector.
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The pharmaceutical small molecule API manufacturing industry is now experiencing a period of rapid change. This change is being driven by factors such as the changing nature of the drugs being made, expiry of patents covering the top-selling pharmaceuticals, the growth of the API manufacturing industry in India, China and Asia, shrinking margins causing downward pressure on pricing and the drive by governments to cut spending on drugs. This paper takes a look at how these trends are helping shape mergers and acquisitions (M&A) activity within this dynamic sector.
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In the last few years, pharmaceutical companies have become increasingly interested in biomarkers and their incorporation into company drug development programmes and use as companion tests for targeted therapeutics. Identifying patients that will benefit from a drug and eliminating those that will not is increasingly important.
