A Study on the Estimation of Running Royalty of Biopharmaceutical Technologies in Licensing Agreements

생명제약 기술 라이선스 경상로열티 추정에 관한 연구

Bioharmaceutical technologies have consistently been areas in which large licensing agreements have been negotiated. However, there are very limited informations in the open literature on how its running royalty rates are determined and no specific methods are yet provided. The purpose of this study is to suggest an appropriate method for the estimation of running royalty of bioharmaceutical technology in licensing agreements. Here distribution of risk-adjusted operating margins are obtained by simulation using statistics of success rates in the stage of clinical trials and profit margins. Three factors based on technology, business and license legal terms are considered and combined as licensing competitiveness level. Finally, reasonable running royalty is estimated by combining simulated distribution and licensing competitiveness level. This suggested method is expected to practically useful for licensor to establish an appropriate running royalty rate for licensing.