CHOOSING THE BEST PARTNER

CHOOSING THE BEST PARTNER - CHOOSING THE BEST...

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CHOOSING THE BEST STRATEGIC/LICENSING PARTNER October 13, 2010 02/10/11 Doremus Advisory Services, LLC 1
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Licensing/Strategic Partnerships 2 02/10/11 Doremus Advisory Services, LLC
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Licensor Licensee 02/10/11 Doremus Advisory Services, LLC 3 Technology Rights $s
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Payments to Licensor Upfront Payments – transaction closing Milestone Payments – licensee achieving specified development or commercial objectives Royalties – tied to sales/profits 02/10/11 Doremus Advisory Services, LLC 4
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Licensee as a Partner Milestone payments and royalties depend on actions of licensee. Not controlled by licensor. Choice of Partner === Likely Return 02/10/11 Doremus Advisory Services, LLC 5
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HAVE A CHOICE OF PARTNERS 6 02/10/11 Doremus Advisory Services, LLC
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Change Your Mindset Licensor becomes a seller of technology 02/10/11 Doremus Advisory Services, LLC 7
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CONDUCT AN AUCTION An auction levels the playing field for sellers. Attracts potential buyers Creates competition Strengthens seller’s behavior. A choice of partners is critical to getting a transaction to recognize the value of your technologies or products. Creating an auction is a central function of the seller’s business development process. 8 02/10/11 Doremus Advisory Services, LLC
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BUSINESS DEVELOPMENT PROCESS I Cast your net widely Communicate, communicate, communicate Time is a resource; not a constraint 9 02/10/11 Doremus Advisory Services, LLC
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COMMUNICATE! To Decision Makers: Scientific, engineers, clinical, medical executives What: Information supported by data How: Conferences Papers Scientific and medical advisory boards 10 02/10/11 Doremus Advisory Services, LLC
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TIME - A NECESSARY RESOURCE More time = More Bidders More Bidders = Better Auction 0 3 1 2 3 4 5 6 7 8 9 10 11 12 Time 11 02/10/11 Doremus Advisory Services, LLC
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THE BUSINESS DEVELOPMENT PROCESS II Run an auction even if you think you have selected your partner Remember, the first good looking offer may not be the best offer 12 02/10/11 Doremus Advisory Services, LLC
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PARTNERSHIP TRANSACTIONS Why Bother? 13 02/10/11 Doremus Advisory Services, LLC
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Resources and Expertise Development Clinical Regulatory Marketing/Distribution/Sales Manufacturing 14 02/10/11 Doremus Advisory Services, LLC
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Cash Flow - Upfront payment Milestone payments Post-commercialization payments Equity investment 15 02/10/11 Doremus Advisory Services, LLC
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Small Company (Licensor) avoids putting large amounts of scarce, expensive capital at risk, but then must share rewards of success. Partner (Licensee) avoids risk of early-stage product failure, when risk of failure is highest, but then must share rewards of success. 16
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This note was uploaded on 02/08/2011 for the course FINANCE 400 taught by Professor Soporzetti during the Spring '11 term at Rutgers.

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CHOOSING THE BEST PARTNER - CHOOSING THE BEST...

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