In licensing

The definitive license agreement should accurately reflect the commercial terms as agreed upon by the parties, with appropriate representations, warranties, covenants and conditions to account for the results of due diligence and allocation of risk between the parties.

The licensee will want to ensure that the license includes all rights it needs — both now and in anticipation of future growth — to produce and sell the products.

The licensor will want to ensure that the scope of the license is not overly expansive potentially resulting in an inadvertent grant of rights to technology or other intellectual property that is not necessary for the production of the products or violation of the terms of an existing agreement it has in place with a third party.

The licensee may also create new IP based on the licensed technology i. As with other commercial agreements, termination rights will typically arise upon breach of the in-license agreement by either party. In addition, both parties will want the right to terminate the relationship in the event regulatory approval is not obtained or obtainable within a predetermined period or upon the occurrence of any other event that makes the commercialization of the product containing the technology impracticable.

The associated license fees are typically deferred or substituted with a convertible note , and while the terms of these licenses are not subject to negotiation, a startup can get access to technology within a relatively short period often as little as 30 days.

He counsels foreign and domestic clients in a broad range of corporate and commercial matters, including licensing and distribution arrangements, mergers and acquisitions, debt and equity financings, joint ventures and other strategic transactions. One answer is that in-licensing is a successful means to an end. If in-licensing speeds progress, and if it is consistent with the scientific goals of the founders, it can be a tool for funding innovation, rather than an alternative to innovation.

Founded in with small investments by Oak Ventures and Scheer and Company, Esperion recruited a management team with proven success in developing lipid-lowering drugs and acquired a relevant late-stage preclinical drug candidate made available by the merger of Pharmacia and Upjohn.

By the time Esperion went public in , it had begun clinical trials on its first product, had also established its own research programs, and acquired several other cardiovascular drug candidates and technologies, some more exciting than the first candidate. By starting with a licensed product in development, Esperion made faster progress and raised more money to fund its own novel programs than likely would have been possible had the company started with promising research programs but no drug in development.

The ultimate attraction of the in-licensing model is that, done right, product acquisition brings rapid progress in product development, which allows fundraising beyond that possible for most technology startups.

In turn, excess funds raised can support more aggressive development of novel technologies. In-licensing is unlikely to become a dominant model for biotechnology startups, because such ventures are always serendipitous, being dependent on the availability of product candidates. Nonetheless, the number of in-licensing businesses is increasing, and it is helpful to offer a few practical points for those considering adopting this business model.

You need to create an in-licensing business around people with medical and clinical development expertise, and not, as with traditional start-ups, around people focused on basic research. Expertise in pharmaceutical product development and clinical development at least sufficient to manage these functions through a contract research organization are critical.

Indeed, some in-licensing companies, notably The Medicines Company Parsippany, NJ , have arisen to carry out clinical development faster and more cheaply than a product's originators. In-licensing companies must recruit staff from clinical development experts at large pharmaceutical companies and contract research organizations, a highly competitive sector of the employment market.

You can make yourself a more attractive partner, however, by discovering value in the product that the pharmaceutical giant did not recognize. Discovery had data suggesting that the product might be of value for treating kidney disease, which was further endorsed by the credibility of the company's highly regarded set of medical advisors. The flow of products available for licensing is neither steady nor predictable. One way to spot potential candidates for in-licensing is to hover around newly merged companies, looking for discontinued projects or disenchanted project leaders.

One company that evolved in this manner is Viropharma Exton, PA. Pleconaril, a treatment for RNA viral diseases, was discontinued after Sanofi acquired Sterling Winthrop in the early s. The scientists involved in pleconaril's development founded Viropharma, and acquired the drug in , taking it into phase 3 trials. The company now has a respected antiviral discovery program.

To date, Novartis has licensed technologies to more than a dozen start-ups. An alternative approach for identifying potential drug candidates is to forge relationships with clinicians at medical schools, who may have insights into new products that their originator lacks.

Academic physicians often get access to new classes of pharmaceutical agents during very early clinical development. These experts, with their intimate knowledge of both disease and patients, may be better positioned to see how a new clinical utility will open new markets than are the pharmaceutical company's marketing department analysts.

To negotiate an in-license successfully, a startup must find a way to bridge the gap between the disparate values placed on the product by the licensor and licensee. Moreover, for the startup, the primary focus is not on revenue but on company value, which is driven by success in clinical development see Fig. Those are the differences that make transactions work. You can also search for this author in PubMed Google Scholar. Reprints and Permissions. Schafer, D. In-licensing as a business model.

Download citation. Issue Date : June The governor appoints members of the oversight boards and commissions, and staff navigates the details and provides customer support to administer licenses of almost half a million working Hoosiers.

The mission of the Producer and Agency Licensing Division is to assure that producers and agencies are properly educated and licensed to sell insurance in Indiana.

The Division is responsible for approving pre-licensing education course content, texts, instructors, program directors and schools. There are currently approximately continuing education providers and approximately pre-licensing providers. The Division currently has approximately 49, resident licenses and approximately , non-resident licenses. The Division also regulates compliance with renewals and continuing education requirements. The ISDH is also responsible for the licensing of radiologic technologists, as well as certification of nurse aides and home health aides.

The Indiana Department of Environmental Management IDEM is the agency that implements federal and state regulations to protect human health and the environment in Indiana while allowing the environmentally sound operations of industrial, agricultural, commercial, and government activities vital to a prosperous economy.

IDEM licenses wastewater operators and apprentices , drinking water operators , and asbestos operators in Indiana.

The Alcohol and Tobacco Commission licenses and regulates more than 10, permits for the manufacture, distribution or sale of alcoholic beverages at restaurants, breweries, wineries, grocery stores, hotels, drug stores, package stores, stadiums, civic centers, social and fraternal clubs, horse tracks and river boats throughout the State of Indiana.

In addition to business alcoholic beverage permits, the Commission licenses and regulates the more than , permits of every bartender, waiter, waitress, salesperson and clerk associated with the sale or service of alcoholic beverages. The Indiana Department of Revenue serves Indiana by administering tax laws in fair, secure and efficient manner.

Our purpose is to provide great government service at a great value to our customers. In addition to administering state tax laws, the department develops regulations and makes decisions about tax policy. In addition to this, if the licensee gets success, the firm has given up profits, and whenever the licensing agreement expires, the firm might find that it has given birth to a competitor.

As a prevention measure, there are certain proprietary product components supplied by the licensor itself. Although, innovation is considered as the appropriate strategy so that the licensee will have to depend on the licensor. On the other hand, the licensee acquires expertise in production or a renowned brand name.