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The Benefits and Impact of Later In-Licensing Deals for Biopharma

The Benefits and Impact of Later In-Licensing Deals for Biopharma
By: biot11 Posted On: March 17, 2020 View: 13

The Benefits and Impact of Later In-Licensing Deals for Biopharma

Xconomy National — 

Biopharma firms are in-licensing candidates later according to an industry expert, who says the trend is impacting the contract development and manufacturing sector.

In-licensing—the practice of paying for rights to develop and commercialize a product discovered by another company—is a widely used strategy in the biopharmaceutical industry.

According to a recent report in Nature, the top 10 drug licensing deals in the first three quarters of 2019 were worth $34 billion (€31 billion), an increase of 10 percent from the $31 billion in the corresponding period in 2018.

Some of the notable deals include:

Gilead’s (NASDAQ: GILD) $5 billion deal with Galapogos for several products—including a Phase 3 idiopathic pulmonary fibrosis candidate known as GLPG1690.

AstraZeneca’s (NYSE: AZN) $6.9 billion deal with Daiichi Sankyo (OTC: DSNKY) for the anti-HER2 antibody–drug conjugate (ADC), trastuzumab deruxtecan, which was approved in the US as Enhertu in December.

In-Licensing Benefits

For the licensor the benefit is access to development support and help with commercialization.

And for the licensee, such agreements allow them to refill and diversify product pipelines with minimal effort.

The approach allows licensees to bypass often costly discovery and preclinical development steps.

Ultimately an in-licensing is about sharing risk for both parties. The developer gets to reduce the risk of failure by working with a partner and the licensee reduces risk of unsuccessful discovery and early phase development.

Contract Manufacturing

Contract development and manufacturing organizations (CDMOs) are also impacted by their customers’ in-licensing deals according to Fiona Barry, associate editor, GlobalData PharmSource.

She tells us the current vogue for later-stage deals is benefiting late stage focused contractors more than those involved in preclinical and early clinical development.

“The timing of in-licensing deals for recently approved NMEs is moving later in the drugs’ life cycles,” Barry explains, citing the firm’s recent report on CDMO dynamics.

“This benefits late-phase clinical and commercial dose CDMOs over preclinical and early-phase clinical CDMOs, since for three-quarters of approved licensed NMEs, outsourcing deals are struck after licensing,” she continued.

Barry went on to say “It is noteworthy this trend or later licensing deals applies to NMEs [New Molecular Entities] that achieved approval; later licensing may be associated with a more successful NME development strategy.”

Image: iStock/PashaIgnatov

Gareth Macdonald is a freelance business and science journalist Follow @GarethMacdonald

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