In a recent survey of 261 CEOs and licensing executives of biotech companies, 84 percent acknowledged that they face one or more of the following
challenges:
Under-the-Radar Gems
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- The ability to identify candidates
- The competition for attractive compounds
- Overexposure of US-based licensing opportunities that drive up headline values
Large pharma companies that were historically proud of their protective R&D "not invented here" mentality have developed impressive
and effective licensing organizations. So it's no surprise that in 2003, more than 24 percent of sales from the top 20 pharma
companies were derived from in-licensed drugs. Following this trend, more and more biotech companies are realizing that they
should match licensing competencies to stay competitive and meet investors' requirements for a balanced pipeline.
A majority of executives surveyed (78 percent) said they were "unsatisfied" with the use of commercially available databases.
While it may reassure management that all bases are covered, in reality, business development executives who work closely
with such systems admit that they spend too much time reviewing out-of-date information and that when an attractive opportunity
is finally identified, it tends to be overvalued and too expensive for in-licensing because of its high visibility to all
subscribers.
Most companies are mining for gold in the same location—the United States. Because the majority of partnering meetings and
financial institution showcases take place in the US, local companies gain higher visibility —and a higher licensing price.
Companies that are looking to in-license should move further downstream and dig in a more attractive mine where very few other
companies are looking. Exciting technologies are emerging from and are available in less-familiar places such as Israel and
Italy, where biotech companies have built solid science but lack the PR resources to share their story. In the next five years,
there will be a growing need for licensing collaborations and an increase in headline value of licensing deals. As the supply
of attractive licensing opportunities dwindles, more and more companies will be looking both into unexplored biotech regions
and into earlier stages of product development.
Ranan Lachman is a principal with 2Value, a New York–based business development firm that identifies licensing opportunities originating
from international private biotech companies, start-ups and universities. He can be reached at 212-897-5808 or rananl@twovalue.com
.
