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Academic Firms See Less Favorable Economic Returns on Biotech Licenses, Study Finds

Bentley University researchers reporting in PLOS One consider biotechnology license terms for academic institutions compared to biotech deals entered into between commercial firms. Based on data for 239 licenses between academic institutions and biotech firms and 916 commercial-to-commercial biotech licenses, the team saw royalty rates of 3 percent for academic licenses and 8 percent for corporate licenses, though this difference narrowed to 3 percent after adjusting for clinical phase. The size of the biotech licensing deals and precommercial payment sizes were also considerably lower for academic firms, the authors explain. While academic firms shored up licensing deals coming in a $0.9 million, on average, with average precommercial payments of $1.1 million, for example, the corporate firms had average licensing deal sizes of $31 million with $25.4 million average precommercial payments. "This analysis suggests the economic returns associated with biotechnology licenses from academic institutions are systematically lower than licenses between commercial firms," they write, "and that this difference is only partially accounted for by differences in the intrinsic terms of the license agreements."