Option & Evaluation Agreements in Pharma and Biotech

Summary

Report description

The Option and Evaluation Agreements in Pharma and Biotech report provides comprehensive understanding and unprecedented access to the option and evaluation partnering agreements entered into by the worlds leading biopharma companies.

This report provides details of the latest option and evaluation agreements announced in the pharmaceutical and biotechnology sectors. Detailed and comprehensive, the report provides details of option and evaluation agreements from 2003 to end 2008.

The report provides a detailed understand and analysis of how and why companies enter option and evaluation deals. The majority of deals are option agreements whereby one party to the agreement obtains an option right from the other party.

Understanding the flexibility of a prospective partner's negotiated deals terms provides critical insight into the negotiation process in terms of what you can expect to achieve during the negotiation of terms. Whilst many smaller companies will be seeking details of the payments clauses, the devil is in the detail in terms of how payments are triggered - contract documents provide this insight where press releases and databases do not.

This report contains over 400 links to online copies of actual option and evaluation contract documents as submitted to the Securities Exchange Commission by pharma/biotech companies and their partners.

Contract documents provide the answers to numerous questions about a prospective partner's flexibility on a wide range of important issues, many of which will have a significant impact on each party's ability to derive value from the deal.

The initial chapters of this report provide an orientation of option and evaluation dealmaking and business activities. Chapter 1 provides a brief introduction to the report, whilst chapter 2 provides an analysis of the trends in option and evaluation as well as a discussion on the merits of each type of deal.

Chapter 3 provides an overview of the structure of option and evaluation deals. The chapter includes numerous case studies to enable understanding of both option and evaluation deals where partnering or acquisition is the primary focus of the agreement.

Chapter 4 provides a review of the leading option and evaluation deals since 2000. Deals are listed by headline value and most active bigpharma. Where the deal has an agreement contract published at the SEC a link provides online access to the contract.

Chapter 5 provides a comprehensive listing of the top 50 bigpharma companies with a brief summary including option and evaluation frequency followed by a comprehensive listing of option and evaluation contract documents available in the public domain. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

Chapter 6 provides a comprehensive listing of all option and evaluation agreement contracts available in the public domain, respectively. The chapter is organized by A-Z company name, option/evaluation type, therapy area and stage of development at signing. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

Key benefits

Option and Evaluation Agreements in Pharma and Biotech provides the reader with the following key benefits:

• In-depth understanding of option and evaluation deal trends since 2000
• Analysis of the structure of option and evaluation agreements with numerous real life case studies
• Comprehensive access to over 400 actual option and evaluation contracts entered into by the world's biopharma companies*
• Detailed access to actual option and evaluation contracts enter into by the leading fifty bigpharma companies*
• Insight into the terms included in a option and evaluation agreement, together with real world clause examples
• Understand the key deal terms companies have agreed in previous deals
• Undertake due diligence to assess suitability of your proposed deal terms for partner companies
• Subject to being published via regulatory requirements of the Securities Exchange Commission.

Report scope

Option and Evaluation Agreements in Pharma and Biotech is intended to provide the reader with an in-depth understanding of the option and evaluation trends and structure of deals entered into by leading biopharma companies worldwide.

Option and Evaluation Agreements in Pharma and Biotech includes:

• Trends in option and evaluation dealmaking in the biopharma industry since 2000
• Analysis of option and evaluation deal structure
• Case studies of real-life option and evaluation deals
• Access to over 400 option and evaluation contract documents
• The leading option and evaluation deals by value since 2000
• Most active option and evaluation dealmakers since 2000
• The leading option and evaluation partnering resources

In Option and Evaluation Agreements in Pharma and Biotech, the available contracts are listed by:

• A-Z
• Headline value
• Option type
• Stage of development at signing
• Therapeutic area

Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

The Option and Evaluation Agreements in Pharma and Biotech report provides comprehensive access to available contract documents for over 400 option and evaluation deals. Analyzing actual contract agreements allows assessment of the following:

• What are the precise option and evaluation rights granted?
• What is actually granted by the agreement to the partner company?
• What exclusivity is granted?
• What is the payment structure for the deal?
• How are sales and payments audited?
• What is the deal term?
• How are the key terms of the agreement defined?
• How are IPRs handled and owned?
• Who is responsible for commercialization?
• Who is responsible for development, supply, and manufacture?
• How is confidentiality and publication managed?
• How are disputes to be resolved?
• Under what conditions can the deal be terminated?
• What happens when there is a change of ownership?
• What sublicensing and subcontracting provisions have been agreed?
• Which boilerplate clauses does the company insist upon?
• Which boilerplate clauses appear to differ from partner to partner or deal type to deal type?
• Which jurisdiction does the company insist upon for agreement law?

Executive Summary

The report provides a detailed understand and analysis of how and why companies enter option and evaluation deals. The majority of deals are option agreements whereby one party to the agreement obtains an option right from the other party.

Detailed and comprehensive, the report provides details of option and evaluation agreements from 2003 to end 2008.

There are two major forms of deal term that allow a party to a deal to secure rights to an asset subject to a future event namely, option and evaluation.

Evaluation agreements allow a party to the deal to obtain rights to a technology or compound, subject to a period of time to evaluate the quality, scope and applicability of the technology to its intended endpoint. Normally the technology is at an early stage and/or unproven and the partnering company wishes to assess the technology as part of the due diligence process in advance of signing a long term licensing agreement.

Evaluation agreements have been a mainstay of technology licensing from the earliest days.

An option agreement differs in that the option is often an integral part of an agreement already entered by the parties, providing the party with the option right to retain or extend certain rights to the technology already partnered.

Option agreements are becoming increasingly popular as they create additional flexibility within a deal for additional rights that the parties do not wish to commit at the outset of the agreement.

This report focuses on option and evaluation agreements and clauses within broader agreements between bigpharma-bigpharma, bigpharma - smaller company, and smaller company-smaller company, providing a detailed insight into all such deals.

This report provides an overview of option and evaluation agreements, the common clauses, rights and options in the agreement, and also a comprehensive review of deals signed in the last five years.

This report focuses on option and evaluation agreements between bigpharma-bigpharma, bigpharma - smaller company, and smaller company-smaller company, providing a detailed insight into all such deals.

This report contains over 400 links to online copies of actual option and evaluation contract documents as submitted to the Securities Exchange Commission by pharma/biotech companies and their partners.
Contract documents provide an important insight into how a prospective partner drafts and agrees key deal terms in a legal document.

Company contract agreements can be used to develop a more in-depth understanding of the prospective partner company's agreement style and the types of clauses that a company accepts as part of a deal.

For example, analyzing actual company agreements allows assessment of the following:

• What are the precise option and evaluation terms agreed between the parties?
• What is actually being optioned by the licensee company?
• What is the payment structure for the option?
• What are conditions of option and evaluation?
• What are the rights of each party?
• How are the key terms of the agreement defined?
• How are IPRs handled and owned?
• Under what conditions can the deal be terminated?
• Which boilerplate clauses does the company insist upon?
• Which boilerplate clauses appear to differ from option to evaluation?
• Which jurisdiction does the company insist upon for agreement law?

The initial chapters of this report provide an orientation of option and evaluation dealmaking and business activities. Chapter 1 provides a brief introduction to the report, whilst chapter 2 provides an analysis of the trends in option and evaluation as well as a discussion on the merits of each type of deal.

Chapter 3 provides an overview of the structure of option and evaluation deals. The chapter includes numerous case studies to enable understanding of both option and evaluation deals where partnering or acquisition is the primary focus of the agreement.

Chapter 4 provides a review of the leading option and evaluation deals since 2000. Deals are listed by headline value and most active bigpharma. Where the deal has an agreement contract published at the SEC a link provides online access to the contract.

Chapter 5 provides a comprehensive listing of the top 50 bigpharma companies with a brief summary including option and evaluation frequency followed by a comprehensive listing of option and evaluation contract documents available in the public domain. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

Chapter 6 provides a comprehensive listing of all option and evaluation agreement contracts available in the public domain, respectively. The chapter is organized by A-Z company name, option/evaluation type, therapy area and stage of development at signing. Each deal title links via Weblink to an online version of the actual contract document, providing easy access to each contract document on demand.

The report also includes numerous tables and figures that illustrate the trends and activities in option and evaluation dealmaking since 2000.

In conclusion, this report provides everything a prospective dealmaker needs to know about option and evaluation deals by using actual contract documents and clauses to provide real-life analysis and insight.

Contents

• Executive Summary
• Chapter 1 - Introduction
• Chapter 2 - Trends in option and evaluation dealmaking
  • 2.1. Introduction
  • 2.2. Difference between option and evaluation deals
    • 2.2.1. Types of option agreement
  • 2.3. Trends in option/evaluation deals since 2000
  • 2.4. Co-promotion options
    • 2.4.1. Attributes of co-promotion in multi-component deals
    • 2.4.2. Reasons for including co-promotion options in a deal
    • 2.4.3. Uptake of co-promotion rights
    • 2.4.4. Co-promotion rights as bargaining chips
    • 2.4.5. The future of co-promotion as part of multicomponent deals
  • 2.5. Company acquisition options
    • 2.5.1. Case study 1: Cephalon - Ception - January 2009
    • 2.5.2. Case study 2: Endo - Indevus - January 2009
    • 2.5.3. The future of option to acquire
• Chapter 3 - Overview of option and evaluation deal structure
  • 3.1. Introduction
  • 3.2. Evaluation agreement structure
    • 3.2.1. Example evaluation agreements
    • 3.2.1.a. Case study 3: BioGenerix - Neose - January 2005
  • 3.3. Option agreement structure
    • 3.3.1. Example option agreements
    • 3.3.1.a. Option to license
      • Case study 4: GlaxoSmithKline - Regulus Therapeutics - April 2008
    • 3.3.1.b. Option to extend/expand applications/territories
      • Case study 5: Salix - Dr Falk - April 2007
    • 3.3.1.c. Option to finance
      • Case study 6: Merck KgaA - Archemix - June 2007
    • 3.3.1.d. Option to co-promote
      • Case study 7: Novartis - Anadys - June 2005
    • 3.3.1.e. Option to manufacture/supply
      • Case study 8: NPS Allelix - Nycomed - July 2007
  • 3.4. Option to acquire agreement structure
    • 3.4.1. Example acquisition option clauses
    • 3.4.1.a. Case study 9: MGI Pharma - AkaRx - October 2007
    • 3.4.1.b. Case study 10: Abbott - Ibis Biosciences - Isis Pharmaceuticals - January 2008
• Chapter 4 - Leading option and evaluation deals
  • 4.1. Introduction
  • 4.2. Top partnering deals incorporated an option clause by value
  • 4.3. Bigpharma option deal activity
• Chapter 5 - Bigpharma option and evaluation agreements
  • 5.1. Introduction
  • 5.2. How to use option/evaluation agreements
  • 5.3. Company option and evaluation agreement listings
    • Abbott
    • Actavis
    • Alcon Labs
    • Allergan
    • Amgen
    • Astellas
    • AstraZeneca
    • Barr
    • Baxter International
    • Bayer
    • Biogen Idec
    • Boehringer Ingelheim
    • Bristol-Myers Squibb
    • Chugai
    • CSL
    • Daiichi Sankyo
    • Eisai
    • Eli Lilly
    • Forest Laboratories
    • Genentech
    • Genzyme
    • Gilead Sciences
    • GlaxoSmithKline
    • Johnson & Johnson
    • King
    • Lundbeck
    • Menarini
    • Merck & Co
    • Merck KGaA
    • Mitsubishi Tanabe
    • Mundipharma
    • Novartis
    • Novo Nordisk
    • Nycomed Pharma
    • Otsuka
    • Pfizer
    • Procter & Gamble
    • Ratiopharma
    • Roche
    • Sanofi-Aventis
    • Schering Plough
    • Servier
    • Shire
    • Solvay
    • Stada
    • Takeda
    • Teva
    • UCB
    • Watson
    • Wyeth
• Chapter 6 - Option and evaluation agreement directory 2003-8
  • 6.1. Introduction
  • 6.2. Company A-Z
  • 6.3. Deals by type
    • Acquisition
    • Co-development
    • Co-marketing
    • Co-promotion
    • This brochure is published by Wildwood Ventures Ltd.
    • 2009 - CurrentPartnering, a division of Wildwood Ventures Limited.
    • Evaluation
    • Extension
    • Financing
    • Licensing
    • Marketing
    • Supply
  • 6.4. Deals by stage
    • Discovery
    • Preclinic
    • Phase I
    • Phase II
    • Phase III
    • Regulatory
    • Marketed
    • Formulation
  • 6.2. Deals by therapy
    • Cardiovascular
    • Central Nervous System
    • Dermatology
    • Gastrointestinal
    • Genitourinary
    • Hematology
    • Hormonal
    • Immunology
    • Infection
    • Inflammation
    • Metabolic
    • Musculoskeletal
    • Oncology
    • Ophthalmic
    • Respiratory
    • Delivery
• Appendices
  • Appendix 1 - Option/evaluation references
  • Appendix 2 - Resources
  • Appendix 3 - Deal type definitions
  • Appendix 4 - Example M&A option contract document
  • Appendix 5 - Example option partnering contract document
• About CurrentPartnering
• Table of Figures
  • Figure 1: Definition of option and evaluation
  • Figure 2: Types of option right
  • Figure 3: Trends in option/evaluation deal announcements, 2000-2008
  • Figure 4: Option/evaluation deals signed at each phase of development, 2000-2008
  • Figure 5: Example deals where co-promotion options have been actively exercised, since 2000
  • Figure 6: Recent 'option to acquire' deals
  • Figure 7: Components of the evaluation deal structure
  • Figure 8: Types of option in an agreement
  • Figure 9: Attributes of option terms:
  • Figure 10: Top 25 partnering deals incorporating an option/evaluation clause by value since 2000
  • Figure 11: Bigpharma - top 50 - option deals since 2003
  • Figure 12: Online partnering resources
  • Figure 13: Deal type definitions
  • Figure 14: Option for M&A agreement between Abbott Molecular - Isis Pharmaceuticals - Ibis Biosciences - January 2005
  • Figure 15: Option in partnering agreement between Array Biopharma - Celgene - September 2007