Wrapping up The Deal's Healthcare Dealmaking Symposium was a panel discussion titled "Licensing Deals." The discussion was moderated by Patrick Clinton, editor in chief of Pharmaceutical Executive; the panelists included Annarie Lyles, head of corporate development at Genmab Inc., and Robert Knowles, senior director of worldwide business development at Pfizer Inc.
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"Pfizer has historically had about 50% of its products come in through licensing," Knowles commented. "[But] licensing is harder and harder these days with all the competition, so we're doing deals earlier and taking on more risk."
"There are a lot of other elements besides the financials that go into licensing deals," Lyles said. "Diligence is very important in our courtship process."
Commenting on equity investments that often go along with licensing deals, Lyles said, "Putting equity in a licensing partner is seen as a vote of confidence in the smaller company, and with a small biotech company, a cash investment can be transformative. ... The investment can also be a first step towards an acquisition."
Knowles added that "with a licensing deal, which can take six months to a year to complete, sometimes more data comes in or something else changes, and it becomes an acquisition deal. Often just a show of interest by Pfizer increases a startup's valuation. There's always been a willingness to put equity in the companies [at Pfizer], including early-stage and platform companies." - George White
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