pharmaceuticals
Large Pharmaceutical companies (Big Pharma) have traditionally been at the
center of most licensing and revenue sharing contracts with other strategic
market players (e.g., other Pharmas, Biotechs, Universities, and other
research-based organizations). As patents expire, new markets evolve, and
portfolio productivity is scrutinized, companies will actively pursue
partnerships based on Corporate Development strategies. These partnerships,
closely scrutinized at every corporate level, are often multi-national in
nature and very complex; prompting many Big Pharmas to assess the overall
workflow, audit process, and accuracy of all financial transactions.
Additionally, the U.S. Sarbanes-Oxley Act has made corporate governance an
operational priority. Senior Pharma Executives validate that the use of an
extensible royalty management system delivers much greater benefit, at a lower
cost, compared to the years required to build and maintain new applications -
applications that ultimately may not support evolving partnership deals, audit
requirements for internal and industry compliance reporting, and the
assimilation of new acquisitions.
biotech
Pressured by investors to produce results (i.e., profits), many larger Biotech
firms have begun enhancing operations and pipelines by partnering with, or
acquiring smaller firms with promising drug candidates or technology, in hopes
of accelerating their drive to profitability. The entire Biotech sector
continues to be ripe for Big Pharmas, who themselves are looking for the next
blockbuster product. To manage drug-licensing risk, Big Pharmas typically offer
Biotech firms upfront advances against future royalties for pre-clinical
products, resulting in larger financial obligations as products reach clinical
trials. Royalties to licensors can be a very significant percentage of the
resulting Biotech firm revenue. Thus, providing an efficient, reliable
mechanism to execute financial transactions is crucial to building a successful
partnership. Payment accuracy is essential for business success; without robust
royalty calculation and reporting, firms run the risk of costly audits and
large potential legal settlements.
medical devices
Medical Device manufacturers, like the examples above, must manage licensed
technologies used in the creation of a finished product. If not managed
carefully, licensees can unintentionally violate licensing contracts and
perhaps lose the right to utilize a component that has been tightly integrated
into their products, resulting in considerable expense and disruption. License
parameters must be tracked closely to fulfill obligations and maintain strong
partnerships. Medical Kit manufacturers bundle internally developed products
with licensed products, technologies, applications and/or components to create
solution kits for end-consumers. The significance of these licensed components
varies greatly, but a license violation, no matter how small, can result in a
product being unavailable for market. These organizations must be equipped to
capture the deployment of licensed components, calculate associated royalties
and produce reports for their licensors.
Potential partners can develop alliances in a wide range of ways, including
traditional licensing and other IP exchanges, co-development or co-marketing
contracts, ownership stake, joint ventures or complete M&A, and other
revenue sharing relationships. Maximizing the mutual value of innovation
partnerships and alliances is imperative as in-licensed innovation plays an
increasingly critical role in product development. By effectively defining and
managing the financial terms of partnerships, Life Sciences companies will
increase the likelihood of sustainable partnership benefits. Alliant Royalties'
Life Science customers have improved their ability to accommodate creative
business terms and audit insight into the lifetime value of partnerships while
leveraging automatic contract and financial workflows to ensure accuracy and
decrease costs.
Financial calculation, payout, accounting, and reporting for a single product
can present significant challenges to many of these companies, when faced with
complex royalties. Issues of territory, tax, rates, and volumes, to name but a
few, all come into play during this multifaceted cycle. As a result, companies
have been clamoring for a flexible solution. REAL Software Systems has
responded with the Alliant product family to meet the critical royalty and
revenue sharing requirements of Life Sciences companies.
To learn more about how RSS can meet specific needs, please e-mail
or call us.
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