BioPharmaceutical Royalty Rates & Deal Terms Report .
BioPharmaceutical RoyaltyRates & Deal Terms ReportLicensing Executives Society(U.S.A. & Canada), Inc.June 2008 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Table of ContentsIntroductory LetterLES Survey CommitteeIntroductionReport HighlightsMethodology12346Analysis and ResultsProfile of ResponsesFixed RoyaltiesTiered RoyaltiesValuationAnalysis of Therapeutic Areas-Royalty Rate & Upfront Payment721355271Appendix A – Aggregate Survey Results by Question92Appendix B – LES BioPharmaceutical Royalty Ratesand Deal Terms Survey Instrument104 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Introductory LetterThe LES (USA & Canada) HealthCare Sector is pleased to present the first “LES BioPharmaceutical Royalty Rates andDeal Terms Survey”. This landmark report is one of the many benefits of LES (USA & Canada) membership and reflectsthe organization’s objective to provide its members with relevant, cutting edge licensing educational information.We believe you will find this report contains many gems on some of the most important areas of deal making in ourindustry.We would like to specifically acknowledge and relay our appreciation to each survey contributor. We applaud theirefforts and willingness to share their deal-related information. It is because of you that we have this survey report toissue. Thank you, and your companies, for your participation.LES (USA & Canada) was assisted in this effort by Veris Consulting, a survey research firm in the Washington DC area,specializing in studies for industry and professional associations. The Veris survey instruments ensured theconfidentiality of all company and deal information reported. We appreciate their fine work in assisting with the design,implementation and tabulation of the survey results.Finally, we want to acknowledge the contributions of the Survey Committee members (listed below). It was theiraggregate efforts that made the survey a reality for the professional benefit of LES (USA & Canada) members. If youhave any suggestions on the survey, or would like to be involved in the future, please contact any of us at info@les.org.Jake SchaibleChair, HealthCare Sector, 2007-20082007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyJim McCarthySurvey Committee, ChairpersonPage 1 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
2008 LES Survey Committee2008 LES BioPharmaceutical Royalty Rates and Deal Terms Survey Committee MembersStart to FinishSteven Renwick, Ph.D., PharmaVentures*Jim Lynch, Strategic AccessJim McCarthy, Expression Genetics (EGEN), ChairpersonDan McGavock, CRA InternationalDeni Zodda, NovaDel Pharma, Inc.Major Contributors who Joined During the ProjectBen Bonifant, Campbell Alliance*James Forte, Campbell AllianceJeff Snell, CRA International* Key contributors2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 2 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
IntroductionThe Licensing Executives Society (U.S.A. and Canada), Inc. (LES) is a professional society representingnearly 6,000 members engaged in the transfer, use, development, manufacture and marketing of intellectualproperty. With the growing economic importance of intellectual property, LES membership has increased toencompass business, technical and legal professionals in a broad range of industries.This report summarizes the results of a targeted survey to LES members in the Health Care (Biotechnologyand Pharmaceutical) Sector, in an attempt to benchmark important areas of deal-making for licensingprofessionals.In particular, this report illustrates detailed analysis on fixed royalties, tiered royalties, valuation, andtherapeutic areas. It provides a more current perspective on licensing royalty rates and deal terms than theFreedom of Information (FOI) approach allows. Actual survey results are also summarized in aggregate form,presented in Appendix A.The last LES survey of this kind was performed in 1992. We hope that this report is useful to LES membersand others who are interested in the dynamically expanding field of licensing and intellectual assetmanagement.All responses to this survey have been kept strictly confidential and at no point will anyone other than selectVeris Consulting, LLC (Veris) employees be granted access to respondents’ submissions.If you have any questions or comments on this report, please send them to info@les.org.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 3 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Report HighlightsProfile and Composition of Responses 230 total deal responses were submitted. Of these deals, 157 responses were complete. The report presentedhere incorporates 155 complete deals, while excluding 2 outliers. Respondent Deal Composition: 28% Pharmaceutical Companies, 26% Biotech Companies, 35% AcademicInstitutions, and 11% Other. Respondent Organization Composition: 36% Pharmaceutical Companies, 37% Biotech Companies, 13%Academic Institutions, and 15% Other.Deal Statistics 77% of the submitted deals were completed in 2006 or 2007. 70% of reported deals were reported by the licensors. Close to 50% of deals were related to Small Molecule. Anticancer, CNS, and Other deals were the most prevalent therapeutic area types submitted.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 4 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Report HighlightsDeal Statistics (continued) Close to 60% of all deals submitted were still in the Preclinical stage of development. 88% of deals were categorized as exclusive. Over 90% of licenses included the U.S. and close to 70% of licenses were considered “worldwide” in scope. 57% of deals represented peak U.S. Annual Sales of 100.0 million.Fixed and Tiered Royalties Of the 155 deals, 83 deals were of the fixed royalty type, 54 were of the tiered royalty type, and 18 did not haveany royalty components. 59% of fixed royalty deals were in the Preclinical stage while 50% of Tiered royalty deals were in the samestage.Valuation While “upfront payment” was the most frequently indicated financial component (80%), “sales milestones”displayed the greatest average amount ( 56,387,000) and median ( 15,000,000). Significant differences in deal terms are noted in the academic deals compared to Biotechand Pharma Deals.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 5 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
MethodologyIn the spring and summer of 2007, Veris staff coordinated with the Licensing Executives Society and aspecially selected committee of LES members to develop a survey instrument that would help determineroyalty rate and deal terms benchmarks for the Licensing Industry. The survey was designed to focus onthe Health Care Sector of the Licensing Industry, specifically the Biotechnology and Pharmaceuticalsegments and collect data on deals from the previous 3 years.After multiple planning meetings, Veris drafted and tested the survey instrument with the help of the LESRoyalty Rate Survey Committee. Veris incorporated edits and changes based on this exercise to constructand refine the final online survey instrument.Veris worked with the committee to create a survey package that included:1.Survey promotions;2.The online, web-based survey instrument, and3.Scheduled reminder emails.During the LES (USA & Canada) annual meeting in October 2007, LES officially announced the survey toall appropriate LES members. In late October, LES provided Veris with a list of 1,569 email addresses thatidentified the senior LES member for each company with LES membership . Veris emailed each companya unique survey account on November 1, 2007. All companies were sent updates of their progress andreminders to continue throughout the survey collection phase. In order to garner further participation, theLES Royalty Rate Committee personally contacted the top 50 Pharmaceutical companies.The survey ended on January 2, 2008 with 230 total respondents. Based on the responses, a majority ofthe participants represented the Biotechnology and Pharmaceutical industries. During the Chicagomeeting in May 2008, the LES Royalty Rate Committee presented the survey’s preliminary findings. A finalreport in electronic format was provided to LES members June 2008.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 6 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of Responses2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 7 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesDealsThere were 230 deal responses with some information. After a review of theinformation provided, 155 deals were included in the analysis.Deals Included in Analysis250230200Numberof DealsRemoved 73incompleteresponses and 2with outlier data*150155100500FullResponsesIncluded inAnalysisDealResponsesReceived2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 8 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesDealsThe number of deals was relatively evenly split among types of respondents.Approximately half of the deals included were provided by pharmaceutical or biotechcompanies and one-third by “academic”Responses Includedin Analysis(n 155 deals)Other (11%)Academic (35%)Pharma (28%)Biotech (26%)Profile Question A) What type of Organization are you?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 9 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesOrganizationsSeveral organizations reported multiple deals. From an organization view, there is ahigher concentration in the number of pharma and biotech organizations represented.Responses Included inAnalysis(n 86 Organizations)Other (15%)Academic (13%)Pharma (36%)Biotech (37%)Profile Question A) What type of Organization are you?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 10 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesYear of DealThere was a bias toward more recent deals. 77% of the deals included in the analysiswere completed in 2006 or 2007.Year Deal Was Completed(n 155 deals)7058626050Numberof Deals40353020100200520062007Q1. What year did deal take place?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 11 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesRole in DealThere were a greater number of deals reported by licensors than licensees.Responses Includedin Analysis(n 155 deals)Licensee (30%)Licensor (70%)Q2: Were you the Licensor or Licensee?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 12 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesPartnering OrganizationApproximately 70% of the deals were reported by the licensor. In over 80 % of casesthe partner was a biotech or pharma company.Partner 711109Partner . Type of Partnering Organization?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 13 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesType of ProductSmall molecules represented approximately half of the deals received and analyzed.Category of Compound/Drug(n 155 analyzed)10075Numberof lMoleculerm0Q5: Type or Category of Compound / Drug?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 14 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesTherapeutic AreaAnticancer deals comprised almost one third of the reported and analyzed deals.Category of Compound/Drug(n 155 analyzed)10075Numberof easat&ivu n tiv entthetihcmdRmorcptrfeooIm n fe DesOnliaBtii-iGtnAAnmoolgtt inOethrQ6: Principle Therapeutic Area for License?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 15 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesExclusivityA strong majority of the deals reviewed were exclusive.Responses Includedin Analysis(n 155 deals)Non-Exclusive (12%)Exclusive (88%)Q8: Exclusive or Non-Exclusive License?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 16 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesTerritoriesMore than 90% of the deals included at least the US and approximately 70% coveredworldwide rights.Territories Included in Deals92%10080Share ofDeals77%72%71%WorldwideUSEuropeJapan6040200Q9 Which Territories Included2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 17 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesPeak US SalesJust over half of the deals were for products with estimated peak US sales of less than 100M, while one-fourth were for greater than 500MAnalyzed Deals Reported(n 155 deals) 1,000M (10%) 100M (57%) 501- 1,000M(15%) 251- 500M (11%) 101- 250M (6%)Q10: Estimated Peak U.S. Annual Sales?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 18 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesCo-Promotion/Co-MarketingOnly approximately 10% of deals included co-promotion or co-marketing.Responses Includedin Analysis(n 155 deals)Co-Promotion (10%)Option (7%)No Co-Promotion (83%)Q11: Deal Include Co-Promo or Co-Marketing Rights?2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 19 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
A Profile of ResponsesRoyalty TypeThe Royalty Analysis draws from a balanced set of dealsTotal Deals ReviewedFixed Royalties155 Deals ReviewedTiered Royalties83 Fixed Royalties*54 Tiered Royalties**18 deals had no royalty component.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 20 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed Royalties2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 21 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesIntroductionThe discussion of fixed royalties draws from the values reported for 83 deals.11Total Deals Reviewed22155 Deals Reviewed55Fixed RoyaltiesTiered Royalties83 Fixed Royalties*54 Tiered Royalties**18 deals had no royalty component.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 22 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesIntroductionAt several points in this analysis, we have grouped the observations according to keypoints in development.Definitions of GroupsGroup 1Group 2Group 3Group 4Group 5PreclinicalIND FiledThrough PhaseII EnrolledPhase IICompletedThrough PhaseIII EnrolledPhase IIICompletedthrough NDASubmittedMarketedProof of ConceptNote: See Survey Question #7, Appendix A: “What Stage of Development for PrincipalIndication?”2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 23 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesIntroductionFor our review of fixed royalties, we look first at deals that did not involve platformtechnologies.11Total Deals Reviewed22155 Deals Reviewed55Fixed RoyaltiesTiered Royalties83 Fixed Royalties*3354 Tiered Royalties*44Preclinical49 Deals ReviewedPre-POCClinical9 Deals ReviewedPost-POCClinicalRegistered1 Deal Reviewed2 Deals ReviewedLaunched6 Deals ReviewedPlatformTechnologies16 Deals Reviewed*18 deals had no royalty component.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 24 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesNumber of Deals by Stage of DevelopmentThe majority of deals with fixed royalties are for preclinical productsFixed Royalties by Stage of Development605040Number ofDeals3020100group 1 preclinicalgroup 2 pre POCgroup 3 post POCgroup 4 -prelaunchgroup 5 launchedStage of Development2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 25 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesAverage Royalty by Stage of DevelopmentWe observed negligible difference between mean preclinical and pre-POC fixedroyalties, although median values highlighted difference. Both the min and the max forpreclinical deals were extremes compared to pre-POC group.Fixed Royalties by Stage of 3%4.6%group 1 - preclinicalgroup 2 - pre POCgroup 5 - launched4%2%0%No. of dealsMedian49963.557.5MinMax0.32528527.52007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 26 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesRoyalties vs. Estimated US RevenueNo clear trend between fixed royalty and predicted sales for preclinical products.Majority of preclinical products predicted to have peak sales 100 MPreclinical Deals: Average Fixed Royalties by Predicted . of deals: 0- 100 101- 250 251- 500 501- 1,000 1,001 3133752007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 27 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesDistribution of Fixed Royalty Levels86% of preclinical fixed royalty deals had a royalty rate of 5%. 49% of deals had afixed royalty rate of 3%.Distribution of Fixed Royalty Levels120%100%Shareof Deals80%60%40%20%0%051015202530Flat royalty rate (%)2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 28 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesFixed Preclinical Royalty by Product TypeIn the sample of preclinical deals, biological products were observed to attract slightlyhigher royalty rates than small molecules5.0%4.0%MeanRoyalty3.0%2.0%1.0%0.0%No. of deals:Monoclonal antibodyPeptide/proteinSmall molecule714172007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 29 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesFixed Preclinical Royalty by Product TypeDeals for biological products tend to involve stacked royalties.100%90%80%Share ofDeals withStackedRoyalties70%60%50%Stacked Royalties40%No Stacked Royalties30%20%10%0%Monoclonalantibody2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPeptide/proteinPage 30Small molecule 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesUp-Front Payments for Early Stage DealsUpfront payments for these early stage deals with fixed royalties averaged below onemillion dollars.1.00.8AverageUp-FrontPayment( M)0.60.40.20.0group 1 - preclinicalNo. of dealsMedianMinMaxgroup 2 - pre POC330.0750.005112007 LES BioPharmaceutical Royalty Rates and Deal Terms Survey90.10.0256.5Page 31 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesUp-Front Payments for Early Stage DealsA majority of the preclinical deals with fixed royalties include development milestonepayments. Few of the deals include sales milestones.Milestones Payments in Preclinical Deals70.0%Average potentialdevelopment milestonepayments: US 2.2 MShare of Deals60.0%50.0%40.0%Average potential salesmilestone payments:US 3.2 M30.0%20.0%10.0%0.0%Deals with Development Milestones2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 32Deals with Sales Milestones 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesPlatform Technology DealsNumber of Deals16Mean5.1%Median4%Minimum1%Maximum17%2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 33 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Fixed RoyaltiesProfile of Preclinical Fixed Royalty DealsProportion ofdeals (%)Average(US M)Median(US M)Range(US lestones65.32.20.90.2-16.9Sales tResearch FundingRoyalties2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 34 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered Royalties2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 35 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesIntroductionAt several points in this analysis, the observations are grouped according to keypoints in development.Definitions of GroupsGroup 1Group 2Group 3Group 4Group 5PreclinicalIND FiledThrough PhaseII EnrolledPhase IICompletedThrough PhaseIII EnrolledPhase IIICompletedthrough NDASubmittedMarketedProof of ConceptNote: See Survey Question #7, Appendix A: “What Stage of Development for Principal Indication?”2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 36 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesIntroductionWe organize our discussion of tiered royalties according to the developmentcategories.11Total Deals Reviewed22155 Deals Reviewed33Fixed RoyaltiesTiered Royalties83 Fixed Royalties*54 Tiered ical27 Deals Reviewed11 Deals Reviewed9 Deals ReviewedRegistered orMarketed7 Deals Reviewed*18 deals had no royalty component.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 37 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesDeals with Tiered RoyaltiesIn this sample, the use of a tiered royalty structure increased as the estimated peaksales volume increased.Share of Deals with Tiered Royalties100%90%80%70%Share ofDeals60%No Royalty50%FlatTiered40%30%20%10%0%Number of Deals(N 155)* 0- 100*54 deals had tiered royalties.89 101- 2509 251- 500 501- 1,000 1,001 241618Estimated Peak US Revenue (million)2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 38 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesNumber of TiersDeals most frequently had three royalty tiers.Number of Royalty Tiers(N 54 Deals with Tiered Royalties)302520Number ofDeals15105023456Number of Tiers2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 39 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesNumber of TiersWhile the most frequently observed number of tiers was three, it is interesting toobserve that many preclinical deals were fairly complex with four or five tiers.Number of Royalty Tiers(N 54 Deals with Tiered Royalties)161412Number ofDealsGroup 1 Preclinical10Group 2 IND Filed throughPhase 2 Enrolled8Group 3 Phase 2 Completedthrough Phase 3 Enrolled6Group 4 Registered throughLaunched42023456Number of Tiers2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 40 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesApproach to Comparing TiersBecause different thresholds were used for changing rates, we used six standardizedrevenue levels to compare royalties.Approach for Comparing Tiered Royalty LevelsCalculated toCompare RatesAcross DealsProvided in SurveyResponsesNumber of Tiers,Thresholds forEach Tier, andRoyalty Rate atEach Threshold2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveySet StandardizedRevenue Levels at 50M, 100M, 250M, 500M, 750M, and 1BPage 41Calculated theRoyalty Level atEach StandardizedRevenue Level 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesTiered Royalties by Stage of DevelopmentThe results are consistent with expectations, but interesting in the detail they provide.Royalty Level vs. Revenue for Deals with Tiered RoyaltiesNumber of Deals20189Group 3—Post-POC161412Royalty10Level8(%)6Group 2—Pre-POC1127Group 1—Preclinical420 0 200 400 600 800 1,000 1,200Revenue (M)2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 42 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesTiered and Fixed RoyaltiesBecause of data limitations, we were only able to compare tiered and Fixed royaltiesfor Groups 1 and 2.Group 1—PreclinicalGroup 2—Pre-POCGroup 3—Post-POCGroup 4—Phase IIIThroughFiledGroup 2711925Total8821115122007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 4354138 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesTiered and Fixed RoyaltiesWithin groups, mean fixed royalty levels were below the values for tiered royalties.Group 1 - PreclinicalGroup 2 – Pre-POCComparison of Tiered vs. Fixed Royalties12Tiered-based on 11 deals108RoyaltyLevel(%)Tiered-based on 27 deals64Fixed—4.6% rate, based on 9 dealsFixed-4.2% based on 63 deals20 0 200 400 600 800 1,000 1,200Revenue (M)2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 44 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesUp Front PaymentsNot surprisingly, the up-front payments “increased” with the level of developmentprogress for those deals with tiered royalties.Up-Front Payments for Deals with Tiered Royalties 45 40 35AverageUp-FrontPayments( M) 30 25 20 15 10 5 0Number of DealsGroup 1Group 2Group 3Group 4271197Note: If respondent left the answer to this question blank, a value of 0 was assumed.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 45 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesUp Front PaymentsFor each group reviewed, a large share of deals involved relatively low up-frontpayments. The spread in deal values is driven by the high-value deals.Distribution of Up-Front Payments for Deals with Tiered RoyaltiesGroup 1—Preclinical100%Group 2—Pre-POCNumber of Deals90%Group 1—Preclinical 2780%Share ofDeals withUp-FrontBelowThreshold70%Group 3—Post-POC60%50%Group 2—Pre-POC11Group 3—Post-POC940%30%20%10%0% 0 20 40 60 80 100 120Threshold Value of Up-Front (million)Note: If respondent left the answer to this question blank, a value of 0 was assumed.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 46 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesUp Front PaymentsWhile some negotiators may be trading off up-front payments and royalty rates, highlyvalued assets appear to be licensed with terms on the high-end of both dimensions.Comparison of Royalty Rate and Up-Front Payment(Preclinical Deals Only, n 27) 25 20Up-FrontPayment(million) 15 10 5 00%5%10%15%Royalty at 500M in SalesNote: If respondent left the answer to this question about up-front payments blank, a value of 0 was assumed.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 47 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesDevelopment MilestonesThe average development milestone payments for this sample did not vary a greatdeal.Development Milestones6050DevelopmentMilestonePayments( M)403020100Number of DealsGroup 1Group 2Group 3Group 4271197Note: If respondent left the answer to this question blank, a value of 0 was assumed.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 48 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesSales MilestonesReported sales milestones tended to be higher as development progress occurred,although Group 4 deals reflected modest sales milestones.Sales Milestone for Deals With Tiered Royalties 120 100 80AverageSalesMilestones(million) 60 40 20 0Number of DealsGroup 1Group 2Group 3Group 4271197Note: If respondent left the answer to this question blank, a value of 0 was assumed.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 49 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesSummaryThis set of deals indicated increasing financial returns associated with later points indevelopment.Group 1—PreclinicalGroup 2—PrePOCGroup 3—PostPOC27119 5% growing to 8% 7% growing to 10% 14% growing to 18% 4M 9M 19MDevelopmentMilestones 53M 48M 55MSalesMilestones 29M 53M 105MSample SizeAverage RoyaltyRateUp-FrontPayment2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 50 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Tiered RoyaltiesSummary of Observations As the estimated peak revenue increases, there is a greater likelihood that a tieredroyalty structure will be employed. In this sample, the deals with tiered royalty structures had higher overall royaltylevels than those with fixed royalties. Average values for upfront and milestone payments can be deceiving – a smallnumber of deals with large payments have a large influence on the averages. The “Median” values and “overall” deal terms are important. Review data in the context of the overall deal.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 51 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
Valuation2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 52 2008, Licensing Executives Society (U.S.A. & Canada), Inc.
ValuationCalculation of NPVA NPV was computed in only 19% of the deals reviewed.Whether NPV was Calculated(n 145 deals)NPV was calculated (19%)NPV was not Calculated(81%)Notes:-Based on 145 total responses – excludes the 11 survey responses in which respondents did not answer thequestion, “Did you calculate an estimated net present value (ENPV) for this deal?”-Numbers in parentheses after descriptions in the legend represent numbers of responses.2007 LES BioPharmaceutical Royalty Rates and Deal Terms SurveyPage 53 2008, Licensing Executives Society (U.S.A. & Canad
Respondent Deal Composition: 28% Pharmaceutical Companies, 26% Biotech Companies, 35% Academic Institutions, and 11% Other. Respondent Organization Composition: 36% Pharmaceutical Companies, 37% Biotech Companies, 13% Academic Institutions, and 15% Other. Deal Statistics 7
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Grand totals of Royalty Points from all contribution levels are also listed. Section 4: Detailed Royalty Override Statement - Summarizes your downline Supervisors contributing Royalty Overrides and their orders for the indicated order month. Detailed Royalty Rollup Statement - Summarizes the rollup contributors and rollup percentage.
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state agency in exchange for the lease of state-agency owned land for oil and gas development: (1) State Land Royalty Fund; (2) Forestry Minerals Royalty Fund; and (3) Parks Mineral Royalty Fund. Eliminates signing fees, rentals, and royalty payments received by a state agency for leases of land for oil and gas development when the land is
Tipologi diagnosa keperawatan keluarga 11. Aktual : masalah keperawatan yang memerlukan tindakan yang cepat 22. Resiko/ resiko tinggi : masalah yang belum terjadi tetapi tanda untuk menjadi masalah aktual 33. Potensial : Keadaan sejahtera, keluarga telah mampu memenuhi kebutuhannya dan mempunyai sumber penunjang kesehatan . Contoh : Gangguan pemenuhan keb. Nutrisi pada An.S keluarga Bp.B .
