2018 was billed by some in the industry as the year of pharma M&As. However, as of September, we still haven’t seen the acquisition values that were expected following a rather barren 2017. What we have seen are record high patent licensing deals.
If your company is built on a single key asset then M&A may represent your best exit. But unless you have the finances (and the stomach) to take your candidate through clinical trials and on to the market, you’re going to be on the lookout for a partner. This is where licensing comes in.
And there’s big money in licensing this year, showing perhaps a shift towards partnering as a preferred method of revenue stream generation.
Q1 of 2018 saw patent licensing deals in the life science sector breach the $35.2B mark – the highest Q1 since before 2010 – with the biggest single deal being Merck & Co’s $5.2B for Eisai’s lenvatinib. Not far behind is the BMS/Nektar deal for $3.7B, which saw Nektar net a staggering $1.85B upfront, including $1B in cash.
It’s not just size that matters. Q1 of this year delivered 72 major patent licensing deals – again, the most since pre-2010. And there’s no sign of this trend abating with a stronger performance predicted as the remainder of 2018 unfolds.