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Why are royalties up-tiered?

Up-tiered royalties are counter-intuitive and don't seem to incentivize the licensee. But they are the only reasonable structure to share the economic success. We show why.

  Company valuation-Arbitrary terminal value

The terminal value is taught in every text-book about valuation. In the drug development industry all projects are unique, have a very long life cycle and are hard to replace. The terminal value does not take account of these features and is unsuitable for the valuation in drug development. We discuss why.

Mannheim 17th November 2008

License Contract Valuation in Excel

Enter a new dimension of license contract valuation

Avance releases the new ri:val v3.0. The designing and valuation of highly complex contracts, even including co-promotion agreements and commercial milestones, usually a daring challenge, has now become a matter of a few clicks. ri:va
l v3.0 features:

  • Multi-indication projects
  • Commercial milestones on cumulative/rolling annual basis
  • Co-development, co-promotion, profit sharing
  • Sublicensing
  • Tiered royalties - Cross royalties
  • Early royalty schemes


The guide to valuation in pharma and biotech. Now in the 2nd edition.

> www.avance.ch
> www.ri-val.com
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