Pharma-Licensing Deal Trends in 2014

6 May

By Lucy Parkinson, Research Manager, LSN

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LSN gathers data on early stage life science companies and investors worldwide, but we also track global licensing activity and trends through the LSN Deal Platform. We analyzed 20 pharma deals that were publicly announced from January through April and spotted three trends that offer a glimpse of what the industry may expect from pharma-licensing activity in 2014.

Orphan Diseases Are Hot

About 25% of the pharma-licensing deals so far this year involve an orphan or rare disease asset.  The accelerated approval pathway for these drugs is driving pharma strategies toward small biotechs that have cultivated expertise and assets in these rare diseases.

Discovery and Target Validation Platforms Are in High Demand 

As big pharma companies have trimmed their in-house R&D operations, they are increasingly turning to outside partnerships for very early stage drug discovery. Four months into 2014, about 40% of the licensing deals in our data set relate to discovery and target validation.

Collaboration Continues to Be a Popular Model

Traditionally, big pharma companies license assets and are wholly responsible for drug development. However, as BioAssociate observed regarding 2013 deals, collaboration models are becoming more popular, because pharma companies can de-risk their strategic investments: they license assets early and collaborate on the development. Of the deals in our platform that involve assets rather than a discovery platform, over one-third are known to be structured as collaborations.

What These Trends Mean for You

Big pharma’s interest in orphan diseases, partnerships for early stage drug discovery, and collaboration for drug development bode well for small biotech companies. A deal with a large industry player can provide a source of revenue and a stamp of approval, both of which are helpful if you’re looking for investment. Collaboration in particular means that you can retain more control and influence when it comes to your assets.

In addition to big pharma companies, an increasing number of virtual pharma investors are focusing heavily either on licensing or acquiring assets rather than simply investing in biotech companies. These are typically investors that specialize in putting assets through clinical trials and then exiting through a deal with a big pharma company. Partners such as these could provide another pathway for your company to reach the market.




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