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Major Pharma Out-Licensing Deal

Sell-Side Transaction Support for Major Pharmaceutical Company Out-Licensing Deal

Background

A public biotechnology company required immediate support to respond to a major pharmaceutical company’s term sheet regarding the licensing of a Phase III asset.

Our client was well-funded and needed to ensure that the potential out licensing transaction would be accretive and viewed favorably by the public equity markets.

Approach

Conducted primary and secondary market research for the company’s Phase III program.

Developed a forecast model with sensitivity analyses to assess the reasonableness of high, mid and low forecast scenarios.

Analyzed and recommended alternative milestone, royalty and cost-sharing structures to better position company management to negotiate with the counterparty.

Interacted with key members of company management and outside counsel to draft a counteroffer.

Outcomes

The company ultimately closed the licensing transaction with significant upfront proceeds.

The public equity markets responded favorably to the deal announcement (+50% stock price change within a month) given attractive contingent consideration and limited future funding obligations.

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