License-Ability Analysis Helps Focus BD Efforts 
Posted by Carlos on Oct 28, 2015

You know what to do...analysis before crossing!

We go to a lot of conferences. And, as a result, we see a lot of assets being marketed by pharma & biotech executives which will likely never find a partner

Now we don’t have a really good sense of the fraction of unlicensed-able assets floating around our world, although it is likely to be quite high.

One way to think about this is to look at conference acceptance rates. If meeting acceptances are roughly 25%, can we assume that 25% of available assets have a remote chance of being licensed?

Ok, that’s a bit of a stretch…

And, we concede the point that an industry average is meaningless of you are the CEO of a company looking to partner an asset, especially if you only have 6 months of cash left.

You don’t care about the industry averages. You only care about your bimodal situation.

One service we provide is a License-ability Analysis. (The “LA” as we call it around here).

This is an admittedly awkward name for something which is not done as often as it should.

Basically, it is an attempt to handicap the probability of a given asset to be successfully out-licensed.

It also helps companies with multiple assets to prioritize their out-licensing activities and resources.

The analysis is essentially a modified gap analysis, with three components:

Asset Analysis – We first conduct a detailed review of the asset, reviewing and assessing the lead indication, data in hand, commercial opportunity, development plan, IP, competition, etc. We typically identify missing data which would enhance partnering discussions, like a reimbursement analysis.

Partner Perspective – The other side of the gap analysis involves exploring licensing from the partner perspective. So given a specific indication(s), we pre-identify and assess potential partners. We highlight which companies would be theoretically interested in the asset.

Then, for each company, we examine their licensing requirements. Many companies publish these freely, but a few phone calls with scouts adds a great deal of color and nuance to these requirements. We also look at partnering history and the current pipeline, identifying gaps in their business where the asset may fit.

DecisionBased on the comparison of the two portions of the analysis, we can arrive at three potential decisions for each asset:

YES – The asset is partnerable right now, and we have identified some priority companies to contact. Go for it, or let us do it for you. 

NO – The asset is not partnerable, even with incremental investment in additional data. The asset simply does not fulfill an unmet medical need, or reimbursement will be problematic, or the clinical trial or commercial spending requirements are too much for a large company to achieve ROI. We can try to out-license it for you, but it will be very very difficult. 

MAYBE – Based on our analysis, you still have a shot. However, there are issues, such as overly-optimistic assumptions, unrealistically small and fast clinical development plans, or some other issue which can be resolved before entering into a full out-licensing process. 

As we meet with companies at BIO Europe next week, this framework will come to mind as we meet with companies and learn more about their assets. 

 

Having an independent consultant take the Partner Perspective is the critical piece of the analysis. 

Why?

Because too often we see companies (and their investors) create stories around assets in which they try to convince a potential partner to make an investment in an asset which will never be of interest in the first place. 

For example, if a multinational pharmaceutical company has made the strategic decision not to in-license antibiotics, it is near impossible to persuade that company to license an antibiotic, irrespective of the lofty revenue forecasts and rapid development path. 

More often than not, this is exactly what we see in partnering decks. We see attempts at convincing any company who will listen that the opportunity is large, quick, and with low risk.

These things may be true, but if the prospective partner has made the decision not to be in that market, then it simply does not matter.

Putting this another way…out-licensing can learn a lesson from a basic marketing practice, namely, understand what your customer wants, and then develop your product to deliver on that want.

This is what this analysis can do for you.

See you in Munich next week!

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