Genegobio Inc.

Out-Licensing of Innovative Drugs for Overseas Rights: Key Processes and Considerations

Finding a partner is not difficult, but identifying the right one and structuring the collaboration optimally present the real challenge. Out-licensing innovative drug rights for international markets is a multifaceted endeavor involving technical, legal, commercial, and regulatory coordination. Our team works carefully in each step to ensure the benifits of our partners. Below is a structured of how we overview a deal in core processes and critical considerations:

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I. Core Process Framework

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1. Value Positioning & Strategic Preparation

   • Patent Audit: Verify global coverage of core compound patents, process patents, and indication-specific patents (focus on remaining validity in target markets).

   • Data Package Development: Compile ICH-compliant preclinical/clinical data, CMC documentation, and market potential analysis (epidemiology, competitive landscape).

   • Market Prioritization: Target regulator-friendly regions (e.g., EMA first, then emerging markets) and assess local payer systems (national insurance, private coverage).

2. Partner Screening & Engagement

   • Strategic Matching: Identify partners aligned with product profiles (e.g., oncology-focused firms for cancer therapies).

   • NDA Execution: Secure confidentiality agreements to share data via virtual data rooms (VDRs).

   • Bid Management: Leverage competitive bidding (RFPs) to maximize deal value.

3. Term Negotiation & Deal Structuring

   • Rights Allocation: Define territorial rights, indication-specific licenses, and future development options.

   • Payment Structure​

   • Control Clauses: Retain co-development rights, audit privileges, and quality oversight.

4. Technology Transfer & Compliance Execution

   • Know-How Transfer: Formalize technical transfer agreements (TTAs) covering manufacturing processes, analytical methods, and stability protocols.

   • Regulatory Alignment: Ensure partner submissions meet originator quality standards (e.g., CMC comparability studies).

   • Supply Chain Compliance: Validate API sourcing and excipient suppliers against target-market GMP requirements.

5. Commercialization & Long-Term Governance

   • Sales Accountability: Enforce minimum annual sales commitments to prevent underperformance.

   • Data Feedback Clause: Require real-world data (RWD) sharing for label expansions.

   • Dispute Resolution: Specify arbitration venues (e.g., Singapore International Arbitration Centre) and governing law (e.g., UK or New York law).

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II. Key Risks & Mitigation Strategies

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1. IP Vulnerabilities

   • Risk: Patent cliffs or compulsory licensing (e.g., India’s Section 84 challenges).

   • Mitigation: Include "patent challenge penalties" in agreements (e.g., heavy fines for invalidation attempts).

2. Regulatory Uncertainty

   • Risk: Additional bioequivalence (BE) studies due to manufacturing site changes.

   • Mitigation: Conduct process validation batches during tech transfer, with 6–12-month buffer periods.

3. Financial Pitfalls

   • Risk: Transfer pricing tactics reducing net sales and royalty payouts.

   • Mitigation: Define "Net Sales" explicitly (exclude internal overheads but allow VAT/duty deductions).

4. Geopolitical Volatility

   • Risk: Trade restrictions disrupting API supply chains (e.g., US-China tensions).

   • Mitigation: Include force majeure exit clauses and dual-sourcing rights.