创新药生存法则生变 PD-1价格腰斩倒逼国际化转型 BD授权成第二增长引擎

MoFo partner Chuan Sun has been quoted in an article that discusses how China's innovative drug firms are shifting from high growth to high-quality development, with PD-1 drug prices halving, pushing companies toward globalization and BD licensing as a key growth driver. 

According to Chuan, the out-licensing strategy offers multiple advantages: first, upfront payments can effectively alleviate a company's financial pressure and ensure its continued operations; second, entering into out-licensing agreements with leading MNCs such as Novartis, Johnson & Johnson, and Roche for specific product lines not only demonstrates the market value of the products to investors, but also leverages the brand reputation and credibility of MNCs to further validate the company's potential. As such, the endorsement of MNCs will serve as a strong testament to the company's capabilities during the next round of financing, which is undoubtedly a sophisticated operational strategy.

"Currently, many innovative pharmaceutical companies, despite having extensive product pipelines, are unable to fully manage all assets. As a result, they often choose to establish NewCos or pursue licensing and collaboration strategies to recover some cash flow. Compared to out-licensing, many companies view establishing a NewCo as a more strategic option. While licensing offers greater certainty, whether future milestone payments and post-commercialization royalties can be realized largely depends on the licensee’s willingness to invest resources and actively support the collaboration."

Chuan noted that timing is crucial for licensing agreements. First, it’s important to assess whether the product is of exceptional quality, as high-quality assets typically command higher prices. Second, it is necessary to assess the pharmaceutical company's dependence on the product and the pressure they face during negotiations. If a company urgently needs funding or is in a weak bargaining position, the counterparty may exploit this to push down the deal value.

Read the full article.