I. Introduction
In our industry, not all companies are built for, or even aspire to, worldwide reach. Many are geographically limited, with commercial operations confined to a single country (such as Israel, Korea, or Japan) or a tightly defined region (such as Spain and Portugal).
This limitation often stems from company origins, such as family-owned enterprises, contract or generic manufacturers that evolved into branded businesses, or firms rooted in a deep understanding of their local markets.
Despite their limited geographic scope, these companies are quite active in pursuing in-licensing opportunities. The motivations are clear: revenue diversification beyond generic erosion, maintenance or enhancement of profitability, and to bolster their reputations as innovative partners.
In-licensed branded assets, particularly those near market entry, can provide a critical edge for smaller companies relative to their competitors. Yet, most licensors want fewer, larger partners. An “Israel-only” or “Portugal-only” deal may be viewed as too narrow for the licensor, especially for products still in development or awaiting FDA/EMA approval.
The result is a structural mismatch between goal, expectations, and financial realities.
This article explores that mismatch: why it exists, how it can be addressed, and when a bolder strategy, such as M&A, may be the key to unlocking long-term success.
II. Challenges Facing Geographically Limited Pharma Companies
For geographically limited pharmaceutical companies, in-licensing can feel like an uphill battle. While these companies may have deep knowledge of their local markets, strong distribution networks, and a desire to grow, licensors often prioritize reach, simplicity, and scale in their partnering strategies.
This disconnect gives rise to several interrelated challenges.
Lack of Global or Regional Reach
Licensors typically seek to out-license assets with as few partners as possible. A pan-European or pan-Asian deal is far more financially attractive than a fragmented network of one-country-at-a-time agreements.
A company limited to a single geography, no matter how capable, may struggle to compete against a partner offering multi-country coverage in one contract.
Regulatory Risk & Approval Status
Early-stage programs demand tight regulatory alignment and global coordination for successful clinical development that is acceptable to multiple agencies. When the product is not yet FDA- or EMA-approved, licensors are often hesitant to carve up the map.
From the licensor’s perspective, granting rights for an individual country before knowing whether the product will even reach those markets can feel risky and premature.
Deal Value Disparity
Smaller geographic scope translates directly into smaller deal value. Thus, licensors can expect smaller upfront payments, smaller milestones, and lower royalty potential for licenses to companies with limited geographic scope.
A partner offering “Spain and Portugal” may simply be unable to match the financial terms of a company offering “Western Europe plus the UK” or “China, Taiwan, and Macao”. This value mismatch often knocks geographically limited companies out of contention, even if they have strong local capabilities.
Many local companies have grown from a manufacturing heritage and may not have robust internal R&D, clinical, or regulatory infrastructure. This limits their ability to support any number of development opportunities, even co-development.
Limited Development Capabilities
Without a credible ability to contribute meaningfully to product development and share development risk, these companies are often seen as pure manufacturers and/or distributors, which is less attractive to licensors seeking true development partners.
Smaller companies may lack a grasp of what is needed to develop and run in-licensing processes. They may lack the strategic planning, a disciplined process, or the executive alignment needed to close complex cross-border deals.
Inadequate or Scarce BD Capabilities
We have seen examples of companies with inconsistent or reactive licensing outreach. It may be a process run by Senior Management on a part-time, ad hoc basis, or by relatively young personnel without experience or strategic context.
Worse still, some firms may be operating with outdated assumptions or organizational inertia, resulting in search processes that seek to replace what was previously successful instead of considering bolder (but potentially painful) opportunities.
III. Strategies to Overcome In-Licensing Limitations
While the challenges facing regionally-limited pharmaceutical companies are real, they are not insurmountable. In fact, companies that are flexible, strategic, and willing to experiment with deal structures can become valuable licensing partners.
Below are several potential strategies for overcoming these limitations.
Piggyback on Global Development
One of the most accessible and obvious strategies is to focus on assets that are already approved by the FDA or EMA, or are in late-stage development with global plans underway.
In such cases, the licensor has already accepted much of the risk and may be more open to regional carve-outs.
However, this approach has its limitations.
The best assets are often licensed earlier in development, so the window of opportunity may be narrow. Additionally, late-stage or marketed products may require broader commercial reach or specialized manufacturing, which are capabilities that some smaller companies may lack.
Form Regional Syndicates or Consortia
Instead of pursuing one-country deals, companies can band together with trusted partners to offer broader geographic coverage. For instance, Advicenne, a France-based company, partnered with Italy-based SPA to commercialize its rare disease drug in Italy, Spain, and Portugal, giving it effective regional reach without owning infrastructure across all three countries.
This partnership may now provide a company like Advicenne the opportunity to in-license candidates and execute a transaction well beyond a “France only” deal.
In other words, a relationship based on an out-licensing transaction may provide a platform for larger in-licensing opportunities in the future.
Governance and trust are key. These partnerships require legal alignment, clear sub-licensing rights, and an understanding of how development and commercialization responsibilities will be shared.
Use Options and Participation Structures
When a full license seems out of reach, an option may provide a strategic foothold. For example, a company might secure the right of first negotiation or first refusal for a territory, contingent on future regulatory or commercial milestones. This keeps the company “in the game” without requiring full commitment or capital upfront.
The risk, of course, is that the Licensor will exclude the Option holder when a broader license is executed with a multinational company with a presence in the option holder’s country or region.
Sub-Licensing and Co-Development Models
Another approach is to license rights to a broader region (e.g., all of Europe or all of Asia) with the intention of sub-licensing part of that territory as the candidate matures in development. This can work particularly well if the company has strong BD networks and is prepared to shoulder development risk.
Indeed, pre-negotiating the sublicensing agreements can help remove the concern that a Licensee will be unable to meet its financial obligations to the Licensor if it fails to sublicense the asset as originally planned.
Co-development partnerships, where risks and costs are shared, can also be attractive to licensors, but they require internal capabilities and capital that may simply not be present nor available.
Offer Risk-Sharing Deal Structures
Smaller companies can differentiate themselves by proposing milestone-heavy, backloaded deals. Instead of competing purely on cash, they can compete on alignment—offering royalties, revenue-share models, or performance-based milestones that tie success directly to outcomes.
Combining this with syndication or sub-licensing can create a very compelling package. However, we acknowledge that many Licensors will not be interested in a “cash light” transaction, especially when their investors are pressuring Licensor management for an exit.
Creative Financing to Support Transactions
For very late-stage or near-commercial assets, geographically-limited companies may be able to tap external capital to strengthen their position in licensing negotiations. Tools such as debt financing, royalty monetization, or forward revenue deals can provide upfront liquidity. This capital can then be invested not only in the deal itself, but also in supporting infrastructure — for example, scaling up the sales and marketing organization.
These approaches can make a “cash-light” company more competitive, especially when licensing a near-term commercial product where speed and capital efficiency are essential.
Adopt a Platform Mindset
Instead of positioning themselves as mere distributors or regional operators, geographically-limited companies can adopt a “platform mindset”—building capabilities, partnerships, and structures that allow them to punch above their weight in licensing discussions.
For example, even a geographically focused company can build capabilities that can be deployed across a broader geography. For example, a single-country company can build a Center of Regulatory Affairs Excellence that encompasses an entire continent. Other forms of infrastructure may include digital marketing, AI-based importation, manufacturing, warehousing and distribution capabilities, and so on.
Careful investments in key segments of the value chain may result in a seemingly limited company becoming the partner of choice for selected activities.
In short, successful in-licensing does not always require a global footprint. It does, however, require creativity, a collaborative mindset, and the courage to challenge traditional assumptions.
IV. Bold Moves: M&A to Expand Geographic Reach
For some geographically limited companies, incremental strategies may not be enough. When organic growth, syndicates, and risk-sharing structures still fall short, it may be time to consider a bolder move: geographic expansion through mergers and acquisitions (M&A).
Consider M&A for Geographic Reach
Even a relatively modest acquisition—such as a distributor, specialty pharmacy network, or regional partner—can dramatically shift how a company is perceived in licensing discussions.
Instead of presenting as a “Spain-only” or “Korea-only” partner, the company becomes a regional platform with broader reach, greater negotiating power, and stronger operational capabilities.
M&A also unlocks access to additional regulatory pathways, payer systems, and physician networks, all of which can be leveraged in future licensing deals.
Expect Integration & Capital Challenges
M&A is expensive, complex, and requires careful integration planning. Cultural misalignment between companies—especially across borders—can derail even the most strategic acquisition. Management bandwidth may be stretched, and the capital required could strain internal resources.
Real-World Examples of Geographic Expansion via M&A
Acino (Switzerland) acquires M8 Pharmaceuticals (Mexico/Brazil): In 2023, Acino acquired M8, a specialty pharma company with strong presence in Mexico and Brazil. This gave Acino direct access to Latin America’s two largest pharma markets and dramatically expanded its licensing and distribution footprint.
Swixx Biopharma (Switzerland) acquires Biopas (Colombia/LatAm): Swixx acquired Biopas, a commercialization specialist operating in 20 Latin American countries. This instantly created a region-wide platform, making Swixx a compelling regional partner.
JW Pharmaceutical (Korea) acquires Euvipharm (Vietnam): JW’s acquisition of Euvipharm, including its large GMP-certified facility, gave the company manufacturing and sales capability in Vietnam and a foothold in Southeast Asia.
Dong Wha Pharm (Korea) acquires Trung Son Pharma (Vietnam): Dongwha’s 2023 acquisition of a majority stake in Trung Son Pharma—a pharmacy chain with over 140 stores—provided direct retail access in Vietnam’s growing pharma market.
These examples show how smart, targeted M&A can elevate a company from local player to regional contender—significantly enhancing licensing potential.
V. Conclusion
Being geographically limited does not mean being strategically limited. While it’s true that global licensors often favor broad regional or global partnerships, smaller pharmaceutical companies can still carve out meaningful roles in the licensing landscape—if they approach the process with clarity, flexibility, and creativity.
From risk-sharing structures to regional syndicates, and from sub-licensing strategies to well-timed M&A, geographically-limited firms have more options than they may realize. The key is to recognize what you bring to the table—whether it’s local regulatory expertise, strong prescriber relationships, or agile commercial infrastructure—and position those assets strategically.
For companies with the ambition and capability, bold moves like regional acquisitions can redefine the narrative entirely. As demonstrated by Acino, Swixx, JW Pharmaceutical, and Dong Wha, even modest M&A activity can radically improve licensing leverage and future growth potential.In a complex, competitive market, credibility and confidence go a long way. With the right strategy and the right partners, geographically-limited pharma companies can do much more than survive—they can lead.
| Strategy | Description | When It Works Best |
|---|---|---|
| Piggyback on Global Development | License late-stage or approved assets | Low risk tolerance; strong sales capabilities |
| Regional Syndicates | Partner with nearby firms to offer broader reach | Shared geography, trust, and legal alignment |
| Use Options/Participation | Negotiate rights of first refusal or future access | When resources are limited or risks are high |
| Sub-Licensing | License a broad region and sublicense portions | Strong BD/legal capabilities; regional connections |
| Risk-Sharing Structures | Low upfront, milestone-heavy terms | Licensor open to long-term incentives |
| Platform Mindset | Build scalable infrastructure or specialty capabilities | Visionary firms investing for future scale |
| M&A | Acquire operations in neighboring geographies | Firms with capital and aggressive growth strategy |
About Us
Since 2010, Lacerta Bio has helped companies across Europe, Asia, and the Americas navigate these challenges. Contact us at info@lacertabio.com to explore how we can support your business development strategic evolution.