Occasionally, the deal can be completely overturned by events such as a change of ownership of one of the parties or a discontinuation of activity in a given therapeutic field. In the latter case, if a therapeutic area appears to be of declining interest, this can addressed by including appropriate performance criteria. It is always prudent to consider the alternative to a negotiated agreement as a potential fall back position. In this regard, it is important to keep a check on what other opportunities there are available and to be aware that the other party may well be running other evaluations and negotiations in parallel. This may influence the financial side of the negotiations, for example if the price for accessing the technology is perceived as being too high then this may close the negotiations.
Reality checks are necessary to review the terms against current market intelligence.
There is a continuous flow of press releases giving outline terms for pharmaceutical licensing arrangements, which can be used to reinforce the valuation of the technology. These private communication links can be used to establish the rationale behind key issues that might not otherwise be openly discussed, as well as to explore any lateral approaches as to what can and cannot work within the deal structure. Hopefully, most of the potential difficulties will have been identified in advance during the due diligence. However, other problems will inevitably arise during the course of the negotiations as the relationship between the companies develops. It is important to identify problem areas early and to tackle the issue quickly.