U.S. biopharma firms have cut technology-licensing deals by over 60 percent since 2006, even as R&D spending and downstream asset values grew. Solon Moreira and colleagues show that Contract Development and Manufacturing Organizations (CDMOs) let companies rent specialized labs and production capacity, turning huge fixed costs into variable fees. Examining 66 public CDMOs and 787 drugmakers from 1995–2015, they find that greater CDMO use and industry investment both predict fewer assets listed for license and fewer completed licensing deals. Smaller firms increasingly launch drugs on their own. The study challenges the idea that owning complementary assets is essential for profiting from innovation, and suggests access may now be enough.
Market for technology 2.0? Reassessing the role of complementary assets on licensing decisions
