STOCKWATCH: European approval - milestone or millstone?

In times past, biotechnology companies were relatively naïve on the terms of a deal to license their product to pharmaceutical companies. A good pharma trick used to be to allow the biotech partner to opt-in on the joint development of the licensed product so that lower upfront milestone payments could be traded for a bigger slice of the downstream commercialization pie. Unfortunately as companies like GenMab and Celltech later found (scripintelligence.com, 2 July 2010 and 19 November 2003), this development commitment rapidly became a millstone around their necks and led to renegotiated terms which favored the pharmaceutical company.

In times past, biotechnology companies were relatively naïve on the terms of a deal to license their product to pharmaceutical companies. A good pharma trick used to be to allow the biotech partner to opt-in on the joint development of the licensed product so that lower upfront milestone payments could be traded for a bigger slice of the downstream commercialization pie. Unfortunately as companies like GenMab and Celltech later found (scripintelligence.com, 2 July 2010 and 19 November 2003), this development commitment rapidly became a millstone around their necks and led to renegotiated terms which favored the pharmaceutical company.

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