services banner

License Contract Structuring and Valuations

Licensing is the most important activity for both biotech and pharma. Valuation ensures to be better prepared for negotiations. You will know your leeway and have rational arguments to ask for better deal terms.

Avance has advised a large number of clients on deal structuring and was involved in deals with a total deal value of over 1 Bio US$. We work fast and even rearrange your term sheet over night.

Biotech companies and universities specially profit from an attractive cost structure for the license contract valuation and structuring service.

The process

Depending on the stage of negotiations, we help you to either prepare an initial draft terms sheet or improve an existing one by reviewing current deal trends and analyzing performance drivers. Our knowledge of the big pharma approach to term sheet valuation and structuring is directly implemented.

The current trend of increasing complexity of license contracts including call-back options, co-development, tiered royalties, sublicense fees, or sales milestones make valuation a challenge. We ensure that you truely understand the value and risk of a term sheet.

Once we have clarified with the client the preference for cash, risk, upside potential, and expected total deal value, we come back with a range of possible license contracts including a low ball and high ball offer, a low and a high risk term sheet. The client can then choose with which term sheet to proceed. If requested, the client is equipped with a custom-made Excel sheet to the own ideas during negotiations.

The results

  • License contract value for licensee and licensor (rNPV and real options)
  • ROI for licensee and licensor (rNPV and real options)
  • Value share between licensor and licensee
  • Monte Carlo simulations
  • Development thresholds for licensee and licensor
  • Scenario analysis
  • Sensitivity analysis
  • Peak sales
  • Value development
  • Alternative deal structures

 

 

License Structuring chart 1
Sensitivity Analysis

License Valuations chart 2
Modified Term Sheet

Click on images to enlarge.



Home | About Avance | Services | ri:val | Publications | Book | Contact | Disclaimer-Terms