The Unique Alliance Management Needs of Pharma Option Deals

by Renee Jansen

As pharmaceutical and mid-sized biotech companies increasingly seek to enhance their pipelines through externalized relationships, the option deal—typically with a smaller biotech—has become an increasingly popular contract structure. This structure allows for greater risk sharing and less complexity between pharma and biotechs. Instead of licensing the compounds and taking on the drug development risks themselves, pharmas fund biotech development and largely leave the biotechs alone to manage the early development.

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