Licensing and partnering are central to the growth of pharmaceutical companies, and are particularly critical for emerging companies. On a spectrum that ranges from developing assets in-house to outright asset acquisition, licensing and partnering occupy an intermediate position, and offer the benefit of risk-reward sharing.
Majority of small pharma/biotech companies have traditionally been focusing on large pharma companies (usual suspects) in order to commercialize their assets. Evidence suggests that:

  • The usual suspects are limited in number
  • The usual suspects engage in a relatively small volume of deals
  • The usual suspects’ asset attribute requirements for licensing and partnering are relatively very high

Consequently, the probability of forging a successful deal with usual suspects is seldom high. Looking for different segments and tiers of companies is another attractive strategy that is primarily driven by the presence of a large number of ‘non-usual suspects’ companies. Interestingly, the terms of the deals with the ‘non-usual suspects’ companies are not materially different from the terms of deals with the usual suspects.