Big Pharma, Bigger Milestones

As Big Pharma licensees continue to drive up the price of promising drug candidates on the whole, do they tend to pay higher milestones than other types of licensees? The chart below, in which we broke out milestone payments made since 2005 by clinical event and type of licensee, would suggest so (see Exhibit 1). Across the board, average milestone payments were higher from Big Pharma than those of other pharmaceutical licensees. Some of these differences stem from the fact that non-Big Pharma licensees tend to take more regional rights than Big Pharmas--for example, the $7 million dollar difference between average payments at NDA filing derives from fact that most of the non-Big Pharma payments were for filings in Europe or Japan. But there are plenty of examples of Big Pharma licensees making milestone payments orders of magnitude larger than others at the same milestone event.

A single unusually high milestone payment at IND filing, for example, is behind the disparity between average payments at that...