The importance of royalties

Discovery and development are a long and risky road. Developing a new medicine can take an average of 10 to 15 years. From R&D, preclinical and clinical trial tests to correspondent regulatory approval such as FDA review and approval, the process is nothing short of grueling.

For every 5,000 to 10,000 compound candidates in the pipeline roughly 250 make it to preclinical testing. If you’re fortunate enough to make it past the clinical stage, you now have 1 drug in regulatory approval. Next, when you add in the total costs, you’re looking at $1.2 to $4 billion including the cost of failures. In today’s market, it’s no wonder alternatives such as collaboration through avenues including rights and royalties have become an opportunity that is quickly gaining acceptance.