Ranges of Biotech Regulatory Milestones

Though there's little uniformity across regulatory milestone payments by and large, the chart below, in which we list the ranges and averages of payments that have been paid over the past five years at common regulatory milestones, reveals that, on average, they rise the farther along the pipeline a compound progresses. Average milestones jumped from $4.6 to $11.3 million from NDA filing to FDA approval, then dropped back to the $5 - $7 million range for follow-on European approvals (not shown are milestones on approval in individual European countries, which ranged from $1 to $2 million).

Making an exception to the rule, however, were average completion of Phase II payments, which, at $7.6 million, were higher than the averages upon initiation and completion of Phase III, thanks to two relatively uncommon equity purchase milestones. Novo Nordisk AS bought $20 million worth of Aradigm Corp. upon the completion of a trial for its AERx pulmonary insulin delivery system in October 2001 [See Deal], and Roche , in what was billed as the biggest Candian development deal ever, paid IsoTeknika Inc. $6 million in cash and just over $9 million in equity last May after a trial of its anti-inflammatory ISA (TX) 247 [See Deal]. Not counting equity purchases, the average completion of Phase II milestone was $4 million, well in line with the increasing stair-step along the development stages.