License, Development, and Commercialization Agreement
(Pharmaceutical Drug)

Summary

This template is a License, Development, and Commercialization Agreement for pharmaceutical products. It is intended for transactions where one party grants a license to another party to develop, manufacture, and commercialize a pharmaceutical product or use related intellectual property. This template includes practical guidance, drafting notes, and alternate and optional clauses. This License, Development, and Commercialization Agreement template identifies the responsibilities of the parties, structures the governance of the relationship, and outlines payment details. The responsibilities detailed in the agreement include, but are not limited to, manufacturing, commercialization, and patent maintenance of the licensed product. Examples of schedules describing the pharmaceutical licensed product, patents, and related intellectual property are included in the template. To mitigate the risks associated with drug development and to leverage different areas of expertise, two or more pharmaceutical companies often enter into a license agreement. Commonly, a pharmaceutical company engaged in drug development will license its pharmaceutical product to another entity to engage in further development and achieve necessary regulatory approvals for the commercialization of a product in a particular territory. The licensed product may be a drug that the licensor owns or it may be a patent or series of patents and any licensed product developed using those patents. This template is drafted to split responsibilities like patent maintenance, manufacturing, commercialization, and development between the licensee and the licensor. You should review each section of the agreement to ensure it reflects the circumstances of your client's transaction. Remember that pharmaceutical products are subject to strict regulatory oversight and approval by the U.S. Food and Drug Administration (FDA). As a result, you should consult regulatory counsel as necessary. This template agreement contemplates that both parties are U.S. entities. For more on life sciences corporate transactions, see Life Sciences Corporate Transactions Resource Kit and License Term Sheet for Life Sciences. For information about joint ventures, see Joint Development Agreements: Drafting and Negotiating an Agreement and Joint Development Agreements: Initial Considerations. Note that joint ventures in the pharmaceutical industry are subject to antitrust scrutiny. You should contemplate the impact that a licensing agreement may have on competition within the relevant market and determine whether the license is reportable under the Hart-Scott Rodino Antitrust Improvements Act of 1976 (HSR Act). For more information about antitrust issues and joint ventures, see Joint Venture Antitrust Resource Kit.