In-licensing
Introduction
If your S&E activities identify intellectual property (IP) that would benefit your business, or if you simply are made aware of an in-licensing opportunity, the in-licensing function is your ability to smoothly navigate from that point to a closed deal.
What
Like most important activities, in-licensing begins with preparation. Understanding industry standard terms and market rates, building your options and “best alternative to a negotiated agreement (BATNA)” precedes first contact with the owner of the IP or asset. Negotiating a term sheet, then moving into contracting and closing brings the in-licensing process to an end. Alliance management, i.e. the work done to ensure technology transfer and any collaborative activities are well accomplished, may or may not be considered part of in-licensing.
When
Most biotech firms identify the IP required for success and differentiation very early on. Their business planning (as described in the operations module) then prepares them to confidently and competently assume the responsibility for advancing someone else’s (often a university’s) IP assets. So, while in-licensing is often a very early consideration, the timing of opening discussions, term sheet negotiations, and closing, can be spread over months, or even years. Once the company is operational, in-licensing is typically an ad hoc activity, driven by the output of S&E and the overall strategy and need.
Why
In-licensing is often an existential activity (without IP, few biotech companies can exist). After the initial in-licensing, it becomes a strategic issue, driving value, freedom to operate, and/or differentiation.
Learning Goals
Industry standard terms and their impact on the parties involved.