Bio-Device Licensing: Strategies for Success

Table of Contents

• 1.1 Industry trends
  • 1.1.1 Growth in importance of formulation and drug delivery technologies
  • 1.1.2 Growth of biotechnology
  • 1.1.3 Academic institutions
  • 1.1.4 Coming of age of the equipment manufacturers
• 1.2 Synergies
• 1.3 Future challenges
  • 1.3.1 Structural issues
  • 1.3.2 Changing sectors of interest
  • 1.3.3 Meeting the needs of the biotech sector
  • 1.3.4 Deal value trends
  • 1.3.5 Freedom to operate
  • 1.3.6 What kinds of partners and partnerships are the major players seeking?
    • .....Life-cycle management of established products
    • .....New product development
  • 1.3.7 The message for smaller companies

• 2.1 Overview of typical deal types and structures
• 2.2 Typical activities involved in negotiating a deal
• 2.3 Confidentiality
  • 2.3.1 Some key issues affecting CDAs
    • .....Timescale
    • .....Conflicts of interest
    • .....Who is covered?
• 2.4 Samples and materials transfer agreements
  • 2.4.1 Some key issues affecting MTAs
    • .....Material definition
    • .....Delivery
    • .....Liability
    • .....Approved studies
    • .....Intellectual property rights
    • .....Payments
• 2.5 Exclusive discussions and option agreements
• 2.6 Standard one-way licensing agreements
  • 2.6.1 Term sheet
  • 2.6.2 Heads of agreement
  • 2.6.3 Negotiating the main agreement
  • 2.6.4 Clauses for inclusion in a licensing agreement
    • .....The parties
    • .....Definitions
    • .....Intellectual property to be licensed (the Product)
    • .....Patents and supplementary protection certificates
    • .....Data exclusivity and orphan drug status
    • .....Trademarks
    • .....Marketing authorisations (product approvals)
    • .....Biological material
    • .....Designs and copyright
    • .....Know-how
    • .....Rights to be licensed
    • .....Background intellectual property
    • .....Levels of exclusivity
    • .....Areas covered by the agreement
    • .....Geographical scope (the Territory)
    • .....Therapeutic sector (the Field)
    • .....Duration (Term)
    • .....Early termination
    • .....Commercial terms
    • .....Fixed payments
    • .....Offset payments
    • .....Royalties
    • .....Payments on supplies of goods
    • .....R&D payments
    • .....Payments in kind
    • .....Equity payments
    • .....Product development
    • .....Ownership of improvements and developments
    • .....Regulatory matters
    • .....Clinical trials
    • .....Development goals and specifications
    • .....Sales and marketing
    • .....Samples
    • .....In-market price constraint
    • .....Liability
    • .....Manufacture and supply of product
    • .....' Technical annex'
    • .....Quality control
    • .....Forecasting volumes
    • .....Reporting and communication
    • .....Safety reporting
    • .....Technical support
    • .....Warranties
    • .....Intellectual property - maintenance, defence and infringement
    • .....Law and jurisdiction
    • .....Dispute resolution
    • .....Other standard clauses
    • .....Confidentiality
    • .....Assignment
    • .....Force majeure
    • .....Announcements
    • .....Schedules
  • 2.6.5 Competition law issues
• 2.7 Collaborative ventures
  • 2.7.1 Joint ventures
    • .....Legal entities
    • .....European Economic Interest Group
    • .....Limited liability company
    • .....Ownership
    • .....Management
    • .....Ownership of intellectual property
    • .....Profit sharing
    • .....Termination
• 2.8 Shared marketing
  • .....Co-marketing
  • .....Co-promotion
  • 2.8.1 Structuring co-promotional deals
    • .....Resource swap
    • .....Share of revenues
    • .....Fee payment
    • .....Rep bonus system
    • .....Timing
    • .....Outcome targets
    • .....How to share detailing
    • .....Management issues
    • .....Causes of failure
• 2.9 Royalty stacking
  • 2.9.1 Royalty stack - the solution
    • .....Share of net income
    • .....Licensing “fee”
    • .....Base royalty on units
    • .....Offset third party royalties
    • .....Manage via a joint venture company
  • 2.9.2 In-licensing of products that require additional technologies
• 2.10 Sub-contracted work

• 3.1 Licensing strategy
  • .....Why do you need 3rd party technology?
  • .....What are the key attributes you are seeking?
  • .....What type of deal do you need?
  • .....What will be the scope of any rights to be obtained?
  • .....What can you offer a partner?
  • .....Target product profile
• 3.2 Finding a partner
• 3.3 Corporate presentational material
  • 3.3.1 Corporate website
• 3.4 Making contact

• 4.1 Resourcing
  • 4.1.1 Product champion
• 4.2 Stepwise approach
• 4.3 Licensing review
• 4.4 Preliminary evaluation
  • 4.4.1 Background information
  • 4.4.2 Internal approach
• 4.5 Full evaluation
  • 4.5.1 Negotiating “Lock-out”
  • 4.5.2 Due diligence
  • 4.5.3 Exchanging information
  • 4.5.4 Technical evaluation
    • .....R&D material
    • .....Device technology
    • .....Safety
    • .....Manufacturing issues
  • 4.5.5 Commercial evaluation
    • .....Competitive profile
    • .....Market research
    • .....Target clinicians
    • .....Data sheet
    • .....Sales and marketing activities
    • .....Impact on existing business
    • .....Pricing
    • .....Health economics
    • .....Generic competition
    • .....Sales forecasts for launched products
    • .....Timescales
  • 4.5.6 Intellectual property
    • .....Patents and know-how
    • .....Trademarks
  • 4.5.7 Other issues
    • .....Other licensees
    • .....Insurance
    • .....Improvements
    • .....Tax
    • .....Legal
  • 4.5.8 Corporate fit
  • 4.5.9 Profit models
  • 4.5.10 Final evaluation and decision
    • .....Board approval

• 5.1 Licensing strategy
  • .....Why are you seeking a partner?
  • .....How much are you willing to contribute to future development?
  • .....What are the key attributes you are seeking from a partner?
• 5.2 Deciding when and how to out-license
  • 5.2.1 Timing
  • 5.2.2 Type of deal to be sought
• 5.3 The licensing team
• 5.4 Preparation of presentational material for products in development
  • 5.4.1 Preparation of the confidential prospectus
    • .....Title page
    • .....Overview
  • 5.4.2 Preparation of the non-confidential brochure
  • 5.4.3 Presentation slides
• 5.5 Preparation of presentational material for marketed products
• 5.6 Other in-house preparations
  • 5.6.1 Additional material
    • .....Intellectual property
    • .....Laboratory notes
    • .....Samples
    • .....Device samples
    • .....Test material
    • .....Review of preclinical and clinical safety
    • .....Review of clinical development status
    • .....Clinical investigators' brochure
    • .....Clinical development plans
    • .....Publications
    • .....Regulatory
    • .....Sales and marketing data
    • .....Production review
  • 5.6.2 Due diligence room
  • 5.6.3 Draft term sheet
• 5.7 Identifying out-licensing partners
  • 5.7.1 Sources of information on potential partners
  • 5.7.2 Target sectors
    • .....Therapy sector and clinician groups
    • .....Type of formulation
    • .....Hospital vs Pharmacy
  • 5.7.3 Key selection parameters
    • .....Territories
    • .....R&D capability
    • .....Sales and marketing fit
  • 5.7.4 Ideal profile
  • 5.7.5 Short-listing companies
  • 5.7.6 Licensing action plan
• 5.8 Seeking partners
  • 5.8.1 Conferences and meetings
  • 5.8.2 Managing contacts
  • 5.8.3 Record-keeping
• 5.9 Evaluating prospective partners
  • 5.9.1 Potential concerns
  • 5.9.2 Optimising potential returns

• 6.1 Putting a value on a deal
  • 6.1.1 Parameters influencing deal values
    • .....Intellectual property
    • .....Stage of development
    • .....Competitive position
    • .....Product fit
    • .....Licensing supply and demand
    • .....Company profiles
    • .....Company sector
    • .....Deal terms
  • 6.1.2 Royalties versus stage payments
• 6.2 A review of deal values
• 6.3 Modelling your product

• 7.1 The importance of activities undertaken before signature
  • 7.1.1 Common goals and specifications
    • .....Goals
    • .....Milestones
    • .....Specifications
    • .....Responsibility
  • 7.1.2 Reporting
• 7.2 Resources
• 7.3 Manage your partner
• 7.4 Building a team
  • 7.4.1 Agreement summary
  • 7.4.2 Cross-cultural issues
    • .....Language
    • .....Decision making
    • .....Regulatory issues
    • .....Currency
    • .....Information quality
    • .....Technical standards
  • 7.4.3 Controlling the information exchange
  • 7.4.4 Task forces
• 7.5 What to do when it all goes wrong
  • 7.5.1 Preventing misunderstandings
  • 7.5.2 Take a positive approach
  • 7.5.3 Resolving conflicts and personality issues
  • 7.5.4 Avoiding litigation
  • 7.5.5 Dispute resolution
  • 7.5.6 Knowing when to quit
  • 7.6 Learn from the experience

APPENDIX A

• .....Sources of information on target companies
• .....Sales audits
• .....Prescription audits
• .....Company fact files
• .....Biotechnology companies
• .....Physician guides
• .....R&D audits
• .....Publications
• .....Internet
• .....Specialist reports
• .....Conferences
• .....Partnering meetings
• .....Insider knowledge

APPENDIX B

• .....Anatomical classifications

APPENDIX C

• Table 2.1 Types of Exclusivity
• Table 2.2 Comparison of the structures of an EEIG and a limited company joint venture
• Table 2.3 Comparison of co-marketing and co-promotion activities
• Table 5.1 Staff to include in out-license review process, by product type
• Table 5.2 Example of outward license action plan
• Table 6.1 A guide to payments and royalty rates by type of compound

• Figure 2.1 Example of a Royalty Stack
• Figure 2.2 “Doughnut ring” intellectual property split for contract work
• Figure 3.1 Overview of the in-licensing process
• Figure 3.2 Example of Opportunities Spreadsheet
• Figure 4.1 The four-step evaluation process
• Figure 5.1 Overview of the out-licensing process
• Figure 5.2 Disclaimer for licensing brochures
• Figure 5.3 Example target profile for out-licensing candidate
• Figure 5.4 Example of blank outward license target company long list
• Figure 5.5 Example of completed outward license target company long list
• Figure 5.6 Example of summary contact status