will 8 be the new 15, page-2

I've put up this information before, but it's probably worth revisiting.

In my experience the pressure to release royalty information would only ever come from the licensor, the biotech or start-up who wanted to show what a good deal they had achieved. Licensees, particularly big Pharma, don’t want that information in the public domain as it might be perceived as a negative; there is nothing to gain from it...
they don’t see it being conducive to their negotiating position if every piece of the deal puzzle is out there. Licensors’ expectations may be raised.

Former CEO, Biotech, Europe


‘... barely more than 1% of all deal-related headlines report actual royalty rates, although these may easily represent most of the value generated by the innovation
in the market. Companies are rather reluctant to show these ?gures as they prefer to reserve some uncertainty about the value, as this could help them negotiate increasingly better terms with any potential subsequent partners. In other words, keeping royalty ?gures to themselves potentially increases their negotiating power. For these reasons a dealmaker is deprived of perhaps the most crucial information in understanding the full ?nancial returns of a commercialisation programme.’

Head, Pharmaceutical Consultancy, UK

Some 51 of the 81 deals (63%) made by P?zer in this period (2007-2011)were with start-ups, and, perhaps not surprisingly, in the context of the overall 0.62% disclosure rate for big pharma, not one of them involved the disclosure of any hard royalty information.

In other words, biotech investors just have to suck it up much of the time.



http://files.pharmadeals.net/contents/toc_rrr2012.pdf