In This Issue LES Spring Meeting: President's Message: CLP Design Team Seeks Your Input New Alliances Lead To Breakthrough Webinars Sector Spotlight High Technology Sector: Biomedical Devices Committee Inaugural Meeting In San Francisco Healthcare Sector: Mass Collaboration In Licensing: Is Wikinomics For You? LES Winter Meeting: LES Local Chapter Julius Vida Honored With Mentor Award Microsoft VP Issues A Call To Arms For New Voices In The IP Reform Debate LES Annual Meeting: |
Sector Spotlight New Committees, Activities and Trends
Chemicals, Energy and Materials Sector CEMC Activities At LES Winter Meeting On February 22, the LES Chemicals, Energy and Materials Committee held a morning meeting during which we reviewed our plans for the upcoming Spring Meeting and continued planning for Vancouver. This nicely complimented our Sector conference call earlier that month. Later that day we held a roundtable on financing chemical startups. The funny thing about roundtables is that you often do not know what you are going to learn since a group discussion depends so much on the group. This one turned out to be fun and thought provoking with contributions from all walks of industry, academia and law. CEMC closed the day in a joint networking dinner with the Industry University Technology Sector in a private room at the Cosmopolitan restaurant. The dinner was well attended and the food was great. Our thanks go to Andrea Cohen of NanoGram for orchestrating this lovely event. As for the Vancouver meeting, we are planning a mini-plenary entitled "Future Forward Chemistry" for Wednesday of the Vancouver meeting. This will touch on the highly relevant topics of sustainable and green chemistry technologies as well as other hot chemistry topics. We are also planning workshops that should be of interest to anyone involved in licensing chemical technologies. As you can imagine, there are about a zillion opportunities to volunteer and help the CEMC. For example, we are seeking volunteers for:
Speaking of volunteers, Roger Hahn of Hahn & Voight PLLC has volunteered to be the official CEMC liaison to the Vancouver Annual Meeting Committee. Also, Vincent Magnotta of Air Products and Gerald Habib of the Berkshire Group have graciously volunteered to co-chair our Deals of Distinction sub-committee. CEMC is actively looking for deals to consider for awarding this year's Deal of Distinction. Anyone that would like to submit a nomination is heartily encouraged to do so on the LES Web site by March 31. If you miss the deadline send the deal information directly to Vincent at MAGNOTVL@airproducts.com or Jerry at ghabib@hvc.rr.com and they will try to have it considered. As you can guess, more volunteers are always welcome. If you would like to assist in any of the above projects please contact me at venturino@stevensdavis.com or my co-chair at leslie.goff@noetictechnologies.org. Keep the CEMC momentum going. High Technology Sector New Digital Content Committee Kicks Off At Winter
Meeting The LES Winter Meeting in San Francisco proved to be a great location for kicking off LES' new Digital Content Committee and recruiting interested parties from the consumer products, software, university, copyright/publishing and biomedical areas. At the encouragement of Don Jarrell, Chair of the LES High Tech Sector, the Digital Content Committee in the High Tech Sector was founded in December 2006 to stimulate discussion in the dynamic area of digitized content and to promote sharing of best practices and new ideas. The new committee's timely emergence is fueled by the transformation of information into digital format and simultaneous advances in content delivery channels creating new opportunities in partnering and licensing. The creation, dissemination and protection of digital content cut across a wide variety of industries, yet these digital content owners confront many similar issues and challenges. From a licensing executive's perspective, these challenges can be substantial—managing assets constantly in flux, effectively licensing these assets, deciding the best mechanism for protection, monitoring appropriate usage and handling infringement issues as they arise. The Digital Content Committee will provide a forum for this diverse community to collaborate and address issues of digital content and data licensing, digital rights management, infringement, and fair use. Gabrielle Campbell of AAMC will lead the committee in its inaugural year. This spring, a new Web community will be launched through LES for members to debate topics, ask questions and learn from peers. The goals of the Digital Content Committee include building LES membership in the field of digital content licensing, encouraging discussion on policy and industry issues affecting digital content management and licensing, and providing professional development learning opportunities. With the borderless nature of digital content, the committee hopes to partner with similar committees on the international level to provide learning opportunities regarding cross-border topics. The Digital Content Committee looks forward to creating co-sponsored workshops, add-ons and panels with other industry sectors and committees for future meetings. Two workshops regarding digital rights management and digital content licensing for the 2007 Annual Meeting have been proposed, but not confirmed, as of publication. Anyone interested in participating in this committee, inquiring about co-sponsorship opportunities or suggesting digital content topics for future meetings should contact Gabrielle Campbell at gcampbell@aamc.org. Biomedical Devices Committee Inaugural Meeting In San Francisco Many thanks from the Biomedical Devices Committee (BMDC) to the LES members who attended the inaugural meeting in San Francisco and made it a success. The meeting was very well attended—at 7:00 a.m. no less! The attendees included Chad Coberly of Zassi Medical Evolutions, Nicole Schumacher of Technology Catalysts, Dan O'Neill of PowerZ Holdings, LLC, Dr. John Bashkin, Joseph Walker of MDInnovators LLC, Teresa Colella of Johns Hopkins, Norman Jacobs, and Edna Mae Rewers of MED Institute Inc. among others. For those of you who could not attend, there will be another opportunity to participate in Atlanta on Friday, May 18.
Reality Check: What Has Pharma Really Been Paying
For Alliances? Biotechnology companies that are publicly traded on stock exchanges in the United States are required by the United States Securities and Exchange Commission (SEC) to file material documents. Biotechnology companies have historically interpreted this requirement conservatively and often filed their contracts involving alliances with commercialization partners, as well as upstream licenses with universities and other technology providers. Recap's Alliances Database contains copies of over 20,000 research, development, license, supply, co-development, distribution and similar alliances commenced since 1973. Recap analysts collect these agreements from the SEC filings of approximately 1,400 companies, the vast majority of which consist of biotechnology companies engaged in pharmaceutical discovery and development. Companies can and usually do request confidential treatment for sensitive business information in these alliances, including royalty rates and other payments, but such grants of confidentiality are time-limited. Recap's analysts first collect these SEC-filed agreements and then attempt to secure unredacted copies through use of Freedom of Information Act (FOIA) requests made to the SEC.
Analysis of Pre-Launch Payments
The data in Figures 2 and 3 support the observation that the later in drug development an agreement is struck, the higher the amount of consideration paid to the originator. For example, median pre-launch payments to originators of Mid Stage alliances were $21.8 million, as compared to $30.7 million for Late Stage deals. While median pre-launch payments for discovery stage alliances exceed those for lead stage deals, the largest component of such discovery stage payments are for R&D reimbursement, and so are not enriching to the originator.
Analysis of Royalty and Other Post-Commercialization Payments
Figures 4 and 5 show the average and median effective royalty rates (i.e. rates adjusted for royalty tiers) and maximum royalty rates (which include consideration from transfer prices), respectively. These data again support the observation that the later in drug development an agreement is struck, the higher the amount of consideration paid to the originator. For example, the data shows that the median effective royalty rate promised to a product's originator in the event of annual sales of $500 million was 7.0% for discovery stage alliances, 8.0% for lead stage, 9.6% for Mid Stage and 15% for Late Stage. On average, the effective royalty rate also increases with greater annual sales of the product. When transfer prices and the maximum royalty rate are combined, the analysis shows that the median compensation to a product's originator increases to 8.0% for discovery stage alliances, 10.0% for lead stage, 15% for Mid Stage and 20% for Late Stage. However, none of these average or median post-commercialization payments include the effect of the 44 alliances that involve profit splits, since this form of consideration isn't directly comparable to royalties. Exchanging BioWorld Dollars for Corporate Credibility |
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| Copyright© 2007 Licensing
Executives Society (U.S.A. and Canada), Inc. |
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For
the Spring Meeting our focus is directed to "green energy and green
chemistry." We have a great line-up of speakers from green chemistry
centers at the University of Southern Mississippi
and University of Alabama. We also have speakers from a new energy start-up,
C2 Biofuels, and large energy representative,
The Southern Company. The session is Friday, May 18 and is one you will not
want to miss. 
Figure 1 shows the number of alliances selected for inclusion in a sample
of development stage R&D alliances commenced between 1981 and 2000 by the
twenty most active biotechnology and pharmaceutical commercialization partners.
The "Top 20" commercialization partners were selected on the basis
of their total number of biotech alliances over the past three decades, including
the alliances commenced by commercialization partners subsequently acquired
by one of the Top 20. For example, Novartis has in aggregate over 700 biotech
alliances, including those commenced by Ciba-Geigy and Sandoz. Thirty-two Novartis
alliances are included in the sample. These are all of the unredacted development
stage R&D alliances involving Novartis as the commercialization partner
in Recap's Alliances Database as of February 2006. A similar process
was followed for the other 19 most active commercialization partners of biotech
R&D programs, resulting in a sample of 259 unredacted development stage
R&D alliances commenced over two decades between 1981 and 2000. 
