Licensing not always the panacea for pharmaceutical industry's problems

With pharmaceutical companies struggling to maintain their R&D pipelines and portfolios with products developed in-house, drugmakers are increasingly turning to licensing to bolster profits. However, the search for late-stage developmental products is becoming tougher and more expensive, with companies now looking towards licensing earlier-stage compounds.

Such a strategy brings with it the potential for greater returns, but it also confers greater risk. Licensing is far from an exact science, and according to a new report from independent market analyst Datamonitor, both licensors and licensees need to do their homework before entering into the actual process of acquiring produc rights. With the number of licensing deals and partnerships made rising, the drivers in today's market increasingly outweigh the resistors, says Datamonitor senior pharmaceutical analyst Alistair Sinclair. "Nevertheless, both the advantages and disadvantages of each proposed partnership must be evaluated fully before the deal is signed, because the failure to do so will greatly compromise the success of an agareement, exemplified by the fact that approximately half of all deals are currently unsuccessful," he notes.

Licensing to fill pipeline gaps