Lecture 6_Licensing in Biotechnology Flashcards
(13 cards)
What is licensing in biotechnology?
process of granting another party the right to use, make, sell, or distribute an IP asset for a defined time, usually in exchange for royalties or fees.
Why do universities or innovators license out their IP?
Faster route to market
Access to resources (e.g., clinical trials, marketing)
Lower risk revenue generation (royalties, milestone payments)
Enables collaboration and funding
What are the main types of licenses?
Exclusive Licence – Only one licensee has rights
Non-exclusive Licence – Multiple licensees can use the IP
Evaluation Licence – Temporary, non-commercial use
Sub-licence – Allows onward licensing
Others – Field-restricted, Territory-specific, Research-only
What types of assets can be licensed?
IP Assets: Patents, copyrights, trade secrets, trademarks, know-how
Technology Assets: Research tools, datasets, software, biological materials
What are the three key purposes of a licence agreement?
Define the rights being transferred
Define compensation
Manage legal and commercial risks
What should be clearly defined in a licence agreement?
Subject matter (e.g. antibody, gene therapy)
Field of use (diagnostic vs therapeutic)
Territory (jurisdictional limits)
Improvements (ownership and access)
What are the common financial terms in a licensing deal?
Upfront fee: One-time payment
Royalties: % of sales, profit, or per-unit
Milestone payments: Triggered by clinical, regulatory, or commercial progress
How are royalty rates determined?
Comparables (market surveys, databases)
Income approach (e.g. 25% Rule of Thumb)
Cost-based approach (recovering R&D)
Typical range: 1–20%, often 3–5%
What are the stages of the licensing process?
Connect – Initial non-confidential exchange
Deeper Dive – NDA, meetings, evaluation
Doing the Deal – Due diligence, term sheet, negotiation
Execution & Future Collaboration
What key issues must be considered in licensing agreements?
Licence scope (rights to make/sell/use)
IP improvements and ownership
Performance milestones
Patent maintenance responsibilities
Bankruptcy provisions and termination rights
Non-compete clauses
What are some challenges in licensing collaborations?
Aligning goals
Building trust
Organisational culture mismatch
Incentivising stakeholders effectively
What non-technical factors should be evaluated before licensing?
Nature of the relationship (short vs long term)
Strategic fit and alignment
Organisational compatibility
Financial viability of the licensee
How do university and industry drivers differ in biotech licensing?
Universities aim for research impact, public benefit, and academic freedom.
Industry seeks profit, speed to market, and competitive advantage.
