Partnering & deal-making services

We support clients with their in-licensing and out-licensing processes, taking a flexible approach and tailoring our service to dovetail with the client’s internal capabilities and activities. If a client does not have internal business development capabilities, we can also take full responsibility for out-licensing mandates.

Our typical process consists of the following steps:

  • working with the client to define the partnering strategy, and to agree on objectives
  • review client data to ensure that they are fit-for-purpose and, where gaps are identified, work with the client to conduct additional studies
  • perform a comprehensive search for prioritization of prospective partners. These are filtered and ranked based on their technical fit
  • develop an approach strategy for each prospective partner, based on our relationships and knowledge of the company
  • work with the client to implement the outreach strategy
  • facilitate access to confidential data, through a CDA and virtual dataroom (we have a preferred relationship with Intralinks)
  • coordinate the communication between prospective partners and our client, and support negotiations of non-binding term sheets (we lead negotiations if requested)
  • coordinate final negotiations and deal completion

The below list of recent projects and case studies can help illustrate the type of partnering and deal-making support we typically provide to clients.

Selection of recent projects:

  • Negotiation support for essential component: A privately-held company developing a universal cancer vaccine was facing negotiations with a party possessing a unique co-factor which was an essential component of the final formulation. Alacrita's client sought strategic advice regarding the optimal time to engage with the counter-party as well as on the construction and terms of the prospective deal.

  • IP negotiation support: A client urgently needed legal access to specific background IP that was in the possession of a company with a shared heritage. The urgency stemmed from an impending financing transaction, and it was essential that the client had clearly established rights in order to be in condition to withstand due diligence.

  • Input into term-sheet negotiations: For a discovery-stage microbiome company, Alacrita developed a preclinical research strategy for its inflammatory bowel disease program. We then developed the high-level strategy into a detailed workflow and subsequently assisted with implementation including putting in place the preclinical models required.

  • Deal benchmarks and term sheet appraisal for an early-stage license deal: An early-stage investor was in the midst of setting up a NewCo for the research and development of novel treatments using a fairly under-researched area of cell biology. However, a separate technology from one of the investor's portfolio companies was required for some characterization work in NewCo. Given our client is a significant shareholder in both companies, they found themselves in a conflicted position with regards to developing objective benchmarks for a licensing deal. Alacrita was therefore called upon to develop relevant deal benchmarks, as well as appraise a draft term sheet for an arms length agreement between the two companies.

  • Valuation of in-licensing opportunity to support the deal-term negotiations: A privately capitalized biotech company in US, which was developing a pipeline of novel drugs to impact iron metabolism, wanted help with the valuation of in licensing opportunity for a rare disease indication to support the deal term negotiations.

    Modeling front-loaded deal vs. risk sharing for molecular design collaboration: A drug discovery company was in discussions with a big pharma about collaborating on a number of strategies that would deliver at least one quality clinical candidate. The pharma company had offered two types of deal: a front-loaded arrangement with R&D costs and milestones up to candidate delivery, and a risk-sharing deal where some of the compensation was to be back-loaded with milestones payable up to market, and possible royalties on net sales. The client asked us to assess its deal-making strategy, develop valuation models and advise on the negotiation strategy with its prospective partner.

Case studies:

Gene therapy valuation and licensing strategy 

Challenge: A public biotech company developing novel immunomodulatory enzymes had been approached by several gene therapy companies interested in licensing the enzyme technology to ablate/minimize the host immune response to AAV viral vectors. Alacrita was asked to evaluate the size of the opportunity and develop an optimal licensing strategy for the biotech company.

Solution: We completed the project in a three-step process:

  • Step 1: We evaluated the potential for the product in gene therapy by characterizing the prospective commercial opportunity in terms of current gene therapy pipelines, size of the commercial opportunity for benchmark products, considering existing and prospective future alternative approaches to mitigate or obviate the immunogenicity of viral vectors. Following this, Alacrita assessed alternative licensing strategies against the prospective commercial opportunity, including exclusive licensing to a single player, non-exclusive licensing to multiple gene therapy companies, or exclusive licensing by field of use.

  • Step 2: Using the results from Step 1, we estimated the risk adjusted net present value of the product using our Monte Carlo valuation methodology.

  • Step 3: Alacrita then evaluated deal structuring options to develop a preferred licensing strategy. This involved developing a set of template deal terms, based on our experience of similar transactions and relevant benchmarks together with our analysis of distribution of deal value between the biotech company and a prospective licensee(s).

The biotech company used the valuation and deal terms to negotiate with several pharma companies in order to obtain the best deal possible for its technology.



Case Study: Out-licensing of a Phase II pharmaceutical asset

Challenge: A public biotech company with a portfolio of clinical stage assets needed to supplement its internal business development capabilities to find a worldwide licensing partner for a Phase II asset.

Solution: Alacrita provided full business development support to the company. We conducted an extensive and systematic analysis to develop a long list of potential partners for the asset, prioritized by the commercial fit, including therapeutic area capabilities, existing product portfolio and financial strength. For each partner, we identified the right, senior level business development contact (if we didn’t already have contacts in the company).

In parallel, we worked with the client to optimize and refine the partnering materials. This including a succinct non-confidential two-pager, a non-confidential presentation and a confidential electronic dataroom with preclinical, clinical and other data.

We then reached out to the prospective partners, hosted introductory telephone calls, coordinated CDAs, managed dataroom Q&A and moved a number of parties to termsheet. A deal was signed 12 months from initiation of the engagement, and the client asked us to help with partnering of another of its assets.

Further case studies regarding Licensing and deal-making are available here.