Executive Summary

In the past, in-licensers of biotech products often turned to up-front equity purchases, rather than cash licensing payments, to help defray P&L costs of licensing. The partner received the same money to fund its research, the rationale went, and the licensee could book at least some of the payment as the acquisition of an asset, rather than an R&D expense. But as In Vivo amply demonstrates, that thinking is so 20th Century. While equity payments often made up more than half the total paid up front in biotech licensings throughout the 1990's, they've fallen to 25% or below, since 2002.