Royalty Financing Partnering Terms and Agreements in Pharma, Biotech and Diagnostics

Date: April 1, 2014
Pages: 314
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Publisher: CurrentPartnering
Report type: Strategic Report
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ID: R6C9424FF40EN
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Royalty Financing Partnering Terms and Agreements in Pharma, Biotech and Diagnostics
The Royalty Financing Terms and Agreements in Pharma, Biotech and Diagnostics report provides detailed understanding and analysis of how and why companies enter royalty financing deals.
  • Comprehensive directory of royalty financing deals since 2007
  • Royalty financing contract documents
  • Royalty financing agreement terms
  • Royalty financing agreement structure
  • Top royalty financing deals by value
  • Most active Royalty financing dealmakers
The Royalty Financing Terms and Agreements report provides comprehensive understanding and unprecedented access to the royalty financing agreements entered into by the worlds leading biopharma companies.

The report provides a detailed understand and analysis of how and why companies enter royalty financing partnering deals.

Understanding the flexibility of a prospective partner’s negotiated deals terms provides critical insight into the negotiation process in terms of what you can expect to achieve during the negotiation of terms. Whilst many smaller companies will be seeking details of the payments clauses, the devil is in the detail in terms of how payments are triggered and rights transferred – contract documents provide this insight where press releases and databases do not.

This report provides comprehensive access to royalty and revenue financing deals as announced in the life sciences industry since 2007.

This report contains links to online copies of actual royalty financing contract documents as submitted to the Securities Exchange Commission by biopharma companies and their partners.

Contract documents provide the answers to numerous questions about a prospective partner’s flexibility on a wide range of important issues, many of which will have a significant impact on each party’s ability to derive value from the deal.

The initial chapters of this report provide an orientation of royalty financing dealmaking and business activities. Chapter 1 provides an introduction to the report, whilst chapter 2 provides an analysis of the trends in royalty financing dealmaking as well as a discussion on the merits and attributes of royalty financing dealmaking.

Chapter 3 provides an overview of the structure of royalty financing deal contracts. The chapter includes numerous case studies to enable understanding of royalty financing deals for royalty assets.

Chapter 4 provides a review of the leading royalty financing deals since 2007. Deals are listed by headline value. Where the deal has an agreement contract published at the SEC a link provides online access to the contract.

Chapter 5 provides a comprehensive listing of royalty financing contract documents since 2007, including deal value, press release and contract document. The chapter is organized by company A-Z.

Chapter 6 provides a comprehensive listing of all royalty financing deal announcements and agreement contracts since 2007 available in the public domain. The chapter is organized by company A-Z and therapeutic area. Each deal title links via Weblink to an online version of the deal record and, where available, the contract document, providing easy access to each contract document on demand.

The report also includes numerous tables and figures that illustrate the trends and activities in royalty financing dealmaking.

In conclusion, this report provides everything a prospective dealmaker needs to know about royalty financing, enabling thorough learning, education and due diligence prior and during the royalty financing dealmaking process.

Report scope

Royalty Financing Terms and Agreements in Pharma, Biotech and Diagnostics is intended to provide the reader with an in-depth understanding of the royalty financing trends and structure of deals entered into by leading biopharma companies worldwide.

Royalty Financing Terms and Agreements in Pharma, Biotech and Diagnostics includes:
  • Trends in royalty financing dealmaking in the biopharma industry since 2007
  • Analysis of royalty financing deal structure
  • Case studies of real-life royalty financing deals
  • Comprehensive listing of royalty financing deals since 2007
  • Access to royalty financing contract documents
  • The leading royalty financing deals by value since 2007
  • Most active royalty financing dealmakers since 2007
  • The leading royalty financing partnering resources
In Royalty Financing Terms and Agreements in Pharma, Biotech and Diagnostics, available contracts are listed by:
  • Company A-Z
  • Headline value
  • Therapeutic area
Each deal title links via Weblink to an online version of the deal record and, where available, the contract document, providing easy access to each contract document on demand.
EXECUTIVE SUMMARY

CHAPTER 1 – INTRODUCTION

CHAPTER 2 – TRENDS IN ROYALTY FINANCING DEALMAKING

2.1. Introduction
2.2. Difference between royalty and revenue financing deals
2.3. Trends in royalty financing deals since 2007
2.4. Reasons for entering into royalty financing partnering deals
2.5 The emergence of royalty asset purchase deals
  2.5.1. Primary players in royalty asset purchase deals
  2.5.2. Recent royalty asset purchase deals
  2.5.3. The role of big pharma in royalty buyback
  2.5.4. The future of royalty asset purchase deals

CHAPTER 3 – OVERVIEW OF ROYALTY FINANCING STRUCTURE

3.1. Introduction
3.2. Anatomy of a royalty asset purchase agreement
3.3. Example royalty financing agreements
  3.3.1. Case study 1: Xoma – UCB – Orbimed Advisors – August 2010
  3.3.2. Case study 2: Dyax – Paul Capital Healthcare – April 2010
  3.3.3. Case study 3: Royalty financing: Biocryst Pharmaceuticals –Shionogi– March 2011
  3.3.4. Case study 4: Royalty asset: TPG – CV Therapeutics – April 2008

CHAPTER 4 – LEADING ROYALTY FINANCING DEALS

4.1. Introduction
4.2. Top royalty financing deals by value
4.3. Top revenue financing deals by value
4.4. Most active royalty financing dealmakers

CHAPTER 5 – ROYALTY FINANCING CONTRACT DOCUMENTS 2007-2014

5.1. Introduction
5.2. Company A-Z
  AxoGen
  Cowen Healthcare Royalty Partners
  CPPIB Credit Investments
  NeurogesX
  Novo
  Ophthotech
  PDL BioPharma
  Pharmakon Advisors
  Pozen
  Stereotaxis
  Vivus

CHAPTER 6 – ROYALTY FINANCING AGREEMENT DIRECTORY 2007-2014

6.1. Introduction
6.2. Company A-Z
6.3. By therapy area
  Central Nervous System
  Genitourinary
  Hospital care
  Immunology
  Infectives
  Metabolic
  Musculoskeletal
  Oncology
  Ophthalmics
  Psychiatry
  Public Health
  Respiratory

APPENDICES

Appendix 1 – Royalty financing references
Appendix 2 – Resources
Appendix 3 – Deal type definitions
Appendix 4 – Example royalty financing contract document

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Introduction

Royalty asset purchase deals are increasing in prevalence as smaller companies and academic institutions are seeking new revenue streams and mitigation of risk.

Companies generally seek to dispose of a royalty asset in order to raise funds to invest in others parts of its business, or to bridge a shortfall in the company’s finances.

Historically this type of deal has been low in prevalence, primarily due to the very strict criteria imposed by royalty financing companies when selecting prospective investment targets. However recent years have seen an increase in royalty financing deal popularity, and it is anticipated that the current financial climate will induce more companies to seek monetization of royalty assets.

Royalty financing provides an alternative to equity financing that provides a lower cost-of-capital source of funding.

Royalty financiers are a keen group but are reluctant in the amount of risk they are willing to take. However, the increased number of players in the royalty financing play will increase competition and drive up deal prices.

Example royalty financing agreements

The following provide a more specific understanding of the royalty asset purchase agreement through analysis of real agreements as submitted to the SEC in the USA.  

The analysis focuses on the specifics of the purchase elements of the example agreements. Therefore, the initial terms in the form of parties, recitals and definitions, and latter clauses in the form of boilerplate clauses have been excluded. However, these can be viewed in full by clicking on the link for each case study agreement.

The clauses from each agreement that are directly relevant to the asset purchase arrangement have been reproduced in their entirety with brief explanatory notes for each section. 

The material was prepared in October, 2013.

TABLE OF FIGURES

Figure 1: Definition of royalty assets
Figure 2: Trends in royalty financing deal announcements, 2007-2014
Figure 3: Trends in revenue financing or ‘synthetic royalty’ deal announcements, 2007-2014
Figure 4: Leading royalty asset investors
Figure 5: Recent royalty asset purchase agreements
Figure 6: Components of the royalty asset purchase deal structure
Figure 7: Top royalty financing deals by value since 2007
Figure 8: Top revenue financing deals by value since 2007
Figure 9: Most active royalty financing dealmakers 2007-2014
Figure 10: Online partnering resources
Figure 11: Deal type definitions
Figure 12: Royalty financing agreement for Qutenza – April 2010

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