Robust 2013 for biotech licensing deals; average up-front payment jump 60%

Biotech licensing deals have been trending up markedly in recent months, according to the new installment of BioMeter, the quarterly report on up-front payments in the life sciences industry produced by law firm Morrison & Foerster (MoFo).

BioMeter did its first survey of regional biotech hot spots, with the Bay Area (of California, USA) – no surprise – earning the blue ribbon as the source of 12 total transactions in 2013. But there were a few eye-openers: the mid-Atlantic region was a close second, sourcing nine deals last year, followed by New York/New Jersey and San Diego tied for third with seven deals each. Boston had five, tied with Seattle and international leader Germany.

Aided by a healthy surge in fourth-quarter transactions, up-front payments for licensing deals for all of 2013 increased more than 60% from the year earlier, averaging $33.9 million. That reflects the payments received by biotech companies for treatments, therapies and devices across all stages of development, from preclinical and discovery through clinical trials and up to approved products. It is also a good illustration of the strong appetite by big pharma companies for new breakthrough treatments, especially as many blockbuster drugs go off patent.