Faced with the encroaching threats of patent expirations and generics, biopharma companies in 2024 invested 33% more in licensing deals, on average, than in 2023 with an eye toward enriching their pipelines with novel and potentially more effective therapies.
Big Pharmas have a looming gap to fill in their pipelines as several of the industry’s most lucrative assets are expected to come off patent. To patch the holes, these companies are turning to biotechs for licensing deals with massive potential earnings.
Merck’s blockbuster cancer therapy Keytruda, for instance, will lose key protections by 2028, while Pfizer and Bristol Myers Squibb are expecting generic erosion for their anticoagulant Eliquis by mid-2028.
Average upfront payments for Phase II lead drugs jumped more than 460% from 2022 to 2024, Alison Labya, a business fundamentals analyst at GlobalData, told BioSpace in an email. Compared with last year’s figures, upfront payments spiked around 30%. Upfront payments, according to Labya, are a “stronger indicator of biopharmaceutical industry activity when evaluating licensing agreements.”
This growth in licensing investments “suggests that biopharmaceutical companies continue to commit large sums of capital to refuel their pipelines for drugs with clinical efficacy and safety data,” Labya added.
The number of licensing deals last year likewise saw a marginal 3.5% increase from 2023, which according to Labya, “signals some revitalization” but remains lower than its recent peak in 2022. This pattern “suggests that the biopharmaceutical industry is still in a recovery phase.”
Big Pharma dominated the top licensing agreements of 2024, the largest of which is a pair of cardiovascular pacts between Novartis and Chinese biotech Shanghai Argo. But smaller biotechs aren’t afraid to make big investments, too, with Sarepta Therapeutics committing nearly $1.1 billion in an RNA interference pact with Arrowhead Pharmaceuticals.
In this article, BioSpace looks at seven of the most notable licensing deals inked in 2024.
Novartis – Shanghai Argo
Date: January 7, 2024
Total disclosed value: $4.165 billion
Novartis opened 2024 with the top deal on this list—a pair of cardiovascular contracts with Chinese biotech Shanghai Argo Biopharmaceutical.
Novartis made an upfront payment of $185 million and Argo is entitled to certain option and milestone payments. Together, the deals could rack up $4.165 billion for Argo, plus tiered royalties. Under the first partnership, Novartis will gain an exclusive license to develop and commercialize an early-stage program for an undisclosed cardiovascular target, as well as the ability to select up to two additional targets for drug discovery. The pharma will then have the option to obtain a worldwide exclusive license for the resulting drug candidates.
Similarly, the second agreement will allow Novartis to exclusively develop a Phase I/IIa cardiovascular program outside the Greater China region.
The Argo deals could help Novartis shore up its cardiovascular franchise amid the encroaching generic threat to its heart failure drug Entresto. Last month, an appeals court ruled against Novartis in its attempt to prevent the entry of a generic version into the U.S. market. Entresto is Novartis’ top asset, bringing in more than $6 billion in net global sales in 2023.
Novartis – PeptiDream
Date: April 30, 2024
Total disclosed value: $2.89 billion
Just a few months after putting more than $4 billion on the line for Argo, Novartis again made a major investment, pledging up to $2.89 billion to expand an existing collaboration with Japan-based PeptiDream.
For $180 million upfront and up to $2.71 billion in development, regulatory and commercial milestones, Novartis will gain access to PeptiDream’s Peptide Discovery Platform System (PDPS) to identify and develop novel macrocyclic peptides. The pharma will be able to select several indications to target, though it has yet to reveal what these are.
Novartis can also conjugate PeptiDream’s peptides with radioligands for therapeutic or diagnostic applications. The pharma’s Lutathera, a radioligand therapy for gastroenteropancreatic neuroendocrine tumors, and Pluvicto, indicated for metastatic castration-resistant prostate cancer, utilize similar technology. Under the expanded agreement, PeptiDream will be eligible for tiered royalties on net sales of any products that reach the market.
Novartis and PeptiDream are longtime collaborators, with their first drug discovery partnership dating back to 2010, according to the April 2024 press release. Novartis licensed the biotech’s PDPS in 2015, followed by a new collaboration in 2019 for the discovery and development of novel macrocyclic peptides against various targets.
Sanofi – Novavax
Date: May 10, 2024
Total disclosed value: $1.2 billion
Despite a stale endemic market, COVID-19 was at the center of one of 2024’s largest licensing deals: a potential $1.2 billion agreement between Sanofi and struggling vaccine developer Novavax.
Novavax provided Sanofi with the sole license to its adjuvanted COVID-19 shot, which the pharma can use alongside its flu vaccines. Sanofi will be solely responsible for developing and marketing combination COVID-19 and flu immunization regimens. Additionally, Sanofi will have a co-exclusive license to co-commercialize Novavax’s adjuvanted COVID-19 shot worldwide, for which the pharma will start booking sales this year.
In return, Sanofi paid Novavax $500 million upfront and promised up to $700 million in development, regulatory and launch milestones. The pharma also took a minority stake in Novavax amounting to less than 5%.
Sanofi’s backing—and money—could prove to be a critical lifeline for Novavax, which for the past few years has struggled to stay afloat. In March 2023, for instance, the company warned investors that it might not have enough funds to continue past February 2024. While Novavax managed to keep itself operational beyond that date, the biotech continues to struggle, with its Q2 2024 earnings falling far short of analyst expectations.
Bristol Myers Squibb – Prime Medicine
Date: September 30, 2024
Total disclosed value: $3.61 billion
In September 2024, Bristol Myers Squibb leaned into one of the hottest areas in biopharma with a potential $3.61 billion gene editing cell therapy partnership with Massachusetts-based Prime Medicine.
BMS made a $55 million upfront payment coupled with a $55 million equity investment to kick off the collaboration. Prime Medicine will be eligible for more than $3.5 billion in milestones—a sum that includes up to $1.4 billion in development milestones and over $2.1 billion in commercialization milestones. BMS has also pledged royalties on net sales of products that arise from the partnership.
Prime Medicine will provide BMS with optimized Prime Editor reagents, which the pharma will use to develop next-generation ex vivo cell therapies for immunology and oncology targets. Prime Medicine will also provide support for gene editing strategy and reagent development.
The Prime partnership could help BMS deepen its pipeline in cell therapy, anchored by its CAR T therapies Breyanzi, indicated for several lymphomas and leukemia, and Abecma, for relapsed or refractory multiple myeloma.
Sarepta Therapeutics – Arrowhead Pharmaceuticals
Date: November 26, 2024
Total disclosed value: $1.075 billion
Large licensing deals aren’t exclusively the territory of Big Pharma. That’s something that Sarepta proved in November 2024, when it put more than $1 billion on the line for an RNA interference pact with Arrowhead Pharmaceuticals.
At the heart of this partnership are four clinical candidates from Arrowhead: ARO-DUX4 for facioscapulohumeral muscular dystrophy, ARO-DM1 for myotonic dystrophy type 1, ARO-MMP7 for idiopathic pulmonary fibrosis and ARO-ATXN2 for spinocerebellar ataxia 2. All four are in Phase I/II development and leverage Arrowhead’s proprietary Targeted RNAi Molecule platform, which allows them to precisely and durably knock down their target genes.
The deal also gives Sarepta access to three preclinical programs, as well as the option to add up to six more muscle, cardiac and/or central nervous system targets for development using Arrowhead’s RNAi technology.
In exchange for these assets, Sarepta made a $550 million upfront payment, alongside a $325 million equity investment in Arrowhead’s common stock. Sarepta also promised to fork over $250 million more, to be paid in $50-million annual installments over five years. Arrowhead is eligible for future milestones and royalties.
Novartis – PTC Therapeutics
Date: December 2, 2024
Total disclosed value: $2.9 billion
Novartis’ third showing on this list is with PTC Therapeutics, a New Jersey biotech focused on rare diseases. The pharma paid $1 billion upfront alongside the promise of up to $1.9 billion in developmental, regulatory and sales milestones to advance PTC518 for Huntington’s disease.
Designed to be taken orally, PTC518 is a small molecule that can cross the blood-brain barrier to reduce the production of the mutant huntingtin protein. In turn, PTC518 is believed to prevent the widespread brain injury and neuronal destruction associated with Huntington’s disease.
PTC518 is currently in the Phase II PIVOT-HD trial, which is expected to wrap up in the first half of this year. Thereafter, Novartis will assume responsibility for the asset through further development and manufacturing.
Earlier in the year, Novartis inked another large neuro deal with Voyager Therapeutics, paying $100 million upfront, including a $20 million equity investment, for access to the biotech’s gene therapies for Huntington’s disease and spinal muscular atrophy. The Voyager agreement involves up to $1.2 billion in milestones.
Bristol Myers Squibb – BioArctic
Date: December 19, 2024
Total disclosed value: $1.35 billion
Like fellow Big Pharma Novartis, BMS leaned into big licensing deals in 2024, with its second entry on this list being a neuro collaboration with BioArctic for $100 million upfront.
The agreement will focus on Alzheimer’s disease, with the partners working on two novel antibodies, BAN1503 and BAN2803, that seek out the more toxic pyroglutamate-modified form of amyloid-beta. The latter asset was designed using BioArctic’s BrainTransporter platform, which makes use of the transferrin receptor to enable penetration of the blood-brain barrier.
BMS will be in charge of the development and commercialization of BAN1503 and BAN2803. Aside from the upfront consideration, BioArctic will also be entitled to up to $1.25 billion in development, regulatory and commercial milestones, plus tiered royalties on global sales of products that make it to the market.
The BioArctic partnership comes after BMS’s $14 billion play to buy Karuna Therapeutics in December 2023 paid off in a major way with the FDA’s approval of Cobenfy in September 2024, marking the first new schizophrenia therapy in more than three decades.
