Examining Today’s Pharmaceutical Licensing Trends
With Pharma struggling to maintain its pipelines and portfolios with products developed in-house, companies are increasingly turning to licensing. However, the search for late-stage developmental products is becoming tougher and more expensive, and companies are now looking towards licensing earlier-stage compounds.
The constant demand for late-stage product candidates has led to spiraling deal costs. Therefore companies are now looking to in-license earlier-stage compounds, demonstrated by the recent resurgence in preclinical and Phase I licensing deals made by the top 20 pharmaceutical companies.
Companies facing patent expiries of key revenue drivers between 2006–12 have in-licensed products to counteract the ensuing sales erosion. However, this tactic is not expected produce a positive growth in the short term for all companies, although it will at least offset part of their revenue deficit.
During 2005–06, Novartis was the leading dealmaker, followed by Bayer-Schering, Roche, and J&J, with the top six companies responsible for 50% of all deals made by the leading 20 companies.
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