New - LES BioPharmaceutical Royalty Rates and Deal Terms Survey

June 2008 - The Licensing Executives Society (U.S.A. and Canada) HealthCare Sector is pleased to present the first "LES BioPharmaceutical Royalty Rates and Deal Terms Survey". This landmark report is one of the many benefits of LES membership and reflects the organization's commitment to provide its members with relevant, cutting edge licensing educational information.

We believe you will find this report contains many key findings on some of the most important areas of deal making in our industry. Highlights of the results include:

Over 150 deals analyzed, involving

• Pharmaceutical Companies          28%
• Biotechnology Companies             26%
• Academic Institutions                      35%
  

120 deals completed in 2006 or 2007

Key Deal Terms

• Small Molecule compounds were included in more than 50% of all deals submitted
• 88% of deals were exclusive
  
• 54% of deals included a fixed royalty; 33% included tiered royalty rates
  
• 80% included an upfront payment
  
• 90% of deals included U.S. rights; 70% were worldwide
  
• 57% of products covered have estimated peak sales of less than $100M
  

Royalty Rates - Fixed and Tiered

• Fixed royalty rates used for most deals with preclinical products
• Average fixed royalty rate for preclinical products:  4.3%
• Average royalty rates for biological products slightly higher than small molecules
• Higher valued assets generated both higher upfront payments and higher average royalty rates
• Range of tiered royalty rates by stage of development:

  • Preclinical                             5-8%
  • Pre-proof of concept            7–10%
  • Post-proof of concept          14 -18%

Analysis of deals by therapeutic area:

• Anticancer
• Cardiovascular
• Central Nervous System (CNS)
• Musculoskeletal
• Ophthalmology

View an excerpt of the Royalty Rate Survey

BioPharma Royalty Rate Survey Press Release

Complete Survey Report
The full survey report, with over 100 pages of analysis and data, is available exclusively to LES (U.S.A. and Canada) members. Visit the Members Only Section to access the complete report.

Not yet a member of LES? Click here to apply for membership.

LES would like to acknowledge the excellent work of the 2007-2008 Royalty Rate survey committee:

Jim McCarthy, Expression Genetics (EGEN), Chairperson
Steven Renwick, Ph.D., PharmaVentures
Jim Lynch, Strategic Access
Dan McGavock, CRA International
Deni Zodda, NovaDel Pharma, Inc.
Ben Bonifant, Campbell Alliance
James Forte, Campbell Alliance
Jeff Snell, CRA International