Fundraising

What are the sub-licensing fees to be paid by the biotech to the IP originator (for ex. university)?

Mimoun Ayoub Director Global Peptides & Sterile Injectables Platform at CordenPharma Group

October 22nd, 2015

What are the typical fees (percentages) to be paid to the licensor (for example a university) in case of an out-licensing (or sublicensing) a product (or a therapeutic indication with the product)? this depends obviously on the stage of development, but what are those numbers like at each stage? Also, is it a standard practice to have payment due at each fund raising?
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Thomas Kaled Business Development Consultant @ thomas.kaled@gmail.com

October 22nd, 2015

In short Mimoun fees are subject to negotiation and the value of the device, method, expertise or drug to the acquiring Biotech. If the University has taken the position of a principle, partner or limited partner will determine how they are treated at each phase of a venture. I have seen percentages of net profits or simply, equity or simply assumption of overhead and acquisition of equipment to be used by both the University and Biotech as a range of 'deal' structure. 

Anonymous

October 22nd, 2015

My technology compay MicroTool licence out 1 of 13  robotic calibration  patents for $600K/year back in the late 90's.  The payments were quarterly.  We kept manufacturing the item and had no restrictions on where the licensor could sell.  It was an awesome deal.

JP Stoops Founder & CEO at Stealth Mode Startup Company

October 22nd, 2015

It depends on the volume, product category and quality of the license.  Royalties payable on physical products can range between 8-15%.  I can't tell if you're talking about drugs but items with high R&D or technical components can warrant lower royalties.  Consumables also warrant lower royalties in the 2-4% range.  I wouldn't see why payments would be tied to fund raising.  They should be based on your forecast of sales over a 2-3 year period and paid quarterly.