Technology portfolio licensing for a cancer treatment/research institution

Situation: A leading cancer treatment and research institution needed a financial advisor for assistance in licensing a technology portfolio related to pre-clinical stage cancer treatment drugs.
CRA contribution: The licensee was a startup biotech company seeking exclusive rights to further develop and commercialize the technology. CRA valued the technology portfolio, evaluated the licensee’s business and capitalization plan, and served as the lead negotiator of financial terms. The final deal structure included upfront royalties, running royalties, sublicensing royalty sharing, and equity in the biotech company.
Result: During negotiations, CRA used financial models to evaluate the sensitivity of alternative deal proposals, such as the tradeoff in value between the upfront equity percentage and the sublicensing sharing percentage. In addition, CRA conducted research to challenge the assertion made by the licensee during negotiations, such as rates paid in “comparable” transactions and the likely timing and size of the biotech’s IPO.