LICENSING / JOINT VENTURES

PBM assists clients in setting up licensing agreements, joint ventures, and other strategic alliances in Asia. PBM can help by:

• Identifying and qualifying prospective partners through our Asian contacts;
• Developing presentations to partner candidates;
• Arranging introductions to appropriate individuals at partner candidates;
• Arranging meetings and attending to meeting logistics;
• Accompanying the client to meetings or attending meetings and negotiations on the client’s behalf;
• Providing guidance on appropriate deal structure, pricing, and other issues;
• Assisting with negotiations, including providing guidance on regulatory issues and cultural nuances of negotiations;
• Closing the deal; and
• Following up once the deal is signed and providing guidance during the implementation phase.

Licensing in Japan. In the early to mid 1990s, licensing activity between U.S. biotech companies and Japanese pharmaceutical and manufacturing firms was frenetic. Many deals were done with little if any due diligence, and as a result, although there have been some success stories, there have also been many failures. Over the last few years, Japanese companies have become more cautious. Today, fewer deals are being struck, but now more due diligence is being done and is an important part of every agreement. Japanese firms today are likely to invest only in later stage products -- generally, products at least in Phase III are preferred.

Joint Ventures in China. In negotiating a joint venture in China, it is often difficult to determine who is in charge on the Chinese side. Representatives from the government (including officials from different levels of government), industry representatives, factory officials, Communist party leaders, and other individuals may be included in the negotiations. These different parties on the Chinese side may have competing interests. Chinese documentation is often very vague, and negotiations can drag on much longer than one would expect -- the Chinese will know that you want to go home with a signed agreement, and will use this "anxiousness" to get the best deal possible.

Another problem that may be encountered is that, especially amongst older, more senior officials, capitalism and competition may not always be fully understood -- those brought up under communism are just learning what capitalism, in a Western sense, truly means. With respect to ownership structure, foreigners are increasingly able to negotiate a majority share of equity JVs. In the old days (1980s and early 1990s), ownership was almost always 50/50. Today, deals with an 80/20 or even 90/10 ownership structure (with the majority to the foreign partner) are more common.

For more information about how PBM can help your company with licensing agreements, joint ventures, or other strategic alliances in Asia, please contact us!

Back to Top