How to Build a Licensing Strategy for Emerging Biotechs

Licensing is a critical growth lever for emerging biotechs, providing opportunities to fund innovation, expand market reach, and accelerate time to market. But crafting an effective licensing strategy requires foresight, a deep understanding of the landscape, and careful execution.

At Sosna + Co, we’ve helped companies—from big pharma to up-and-coming start-ups—across 28 countries secure more than $250M in deals, acting as their trusted outsourced business development partner. And licensing is one of the main ways we help these companies achieve their goals.

Here, we share key insights on building a licensing strategy tailored to the unique needs of emerging biotech companies.

1. Define Your Licensing Goals

Often companies will come to us with an idea in mind but no concrete objective. This can create issues because, while they know licensing may be the ideal next step, the strategy (and, ultimately, tactics employed) will depend entirely on the goal you want to achieve.

Before initiating any licensing discussions, it’s essential to define your objectives clearly. Are you looking to:

  • Monetize early-stage assets to fund further R&D?

  • Access specialized expertise or resources that your organization lacks?

  • Accelerate commercialization in specific markets?

Your goals will shape the licensing terms and help you identify the ideal partners.

2. Assess Your Assets

With your objective set, the next step is to assess whether licensing is a realistic strategy for you at this time. Some companies are laser-focused on securing a licensing partner, when in reality they are not yet in a position to license in the near term.

Not all assets are licensing-ready. Conduct a thorough evaluation of your pipeline and existing IP to:

  • Identify assets with the highest market potential

  • Highlight differentiation factors, such as novel mechanisms of action or superior efficacy data

  • Address gaps, including IP protection or clinical data, that may weaken your negotiating position

3. Conduct Research

Understanding the competitive and regulatory landscape is vital – and yes, research is a natural step in the process.

Market trends reveal unmet needs and high-demand therapeutic areas, while competitor activity provides benchmarks for financial terms and partnership structures. At Sosna + Co, we routinely conduct research to help our clients identify areas of potential which then informs their strategy.

Additionally, staying informed on regional regulatory pathways ensures that your licensing strategy accounts for local approval requirements.

The bottom line: comprehensive research will position you to negotiate favorable terms while showcasing your preparedness to potential partners.

4. Identify and Vet Potential Partners

Ultimately, your licensing partner will make or break your success. Therefore, choosing the right one is a big deal!

Target partners who align with your goals, whether they’re big pharma players, mid-sized biotech companies, or regional specialists. When vetting potential collaborators, consider:

  • Strategic fit: Do they have experience in your therapeutic area?

  • Operational capability: Can they handle clinical development or commercialization effectively?

  • Financial strength: Do they have the resources to invest in the success of your asset?

Building relationships well before formal negotiations can also increase the likelihood of success.

This is one thing we pride ourselves on as a team. We are constantly nurturing our extensive relationships, which directly benefits our clients in the long run.

5. Build a Flexible Licensing Framework

It should come as no surprise: licensing models aren’t one-size-fits-all. Consider structuring agreements that reflect both parties’ needs, such as:

  • Tiered milestones: Link payments to specific development and commercialization achievements.

  • Revenue sharing: Balance risk and reward with royalties tied to performance.

  • Geographic exclusivity: Offer regional rights to incentivize local expertise.

6. Strengthen Your Negotiation Position

Preparation is key to securing favorable terms. Robust preclinical or clinical data can underscore your asset’s potential, while strong IP protection enhances your credibility.

Additionally, having a fallback plan ensures you remain resilient if negotiations stall. A well-prepared negotiation strategy demonstrates professionalism and builds trust with your partners.

7. Prioritize Relationship Management

Licensing is more than a transaction—it’s the start of a long-term partnership. Post-deal success depends on:

  • Clear governance: Define roles, responsibilities, and decision-making protocols

  • Open communication: Establish regular updates and checkpoints to align on progress

  • Flexibility: Adapt to unforeseen challenges collaboratively

Investing in the relationship early can mitigate risks and ensure smoother execution. Better yet, have an experienced partner like Sosna + Co in your corner to handle this heavy lifting.

Why Work with Sosna + Co for Your Licensing Strategy?

Building a licensing strategy can be daunting, but you don’t have to do it alone. At Sosna + Co, we seamlessly integrate into your executive team to drive results. With access to a global network of 130,000+ senior life sciences executives, we identify the right partners, accelerate deal timelines, and secure strategic licensing agreements.

Whether you’re looking to license out your early-stage assets or secure partnerships to bring your innovations to market, our track record speaks for itself: $250M in closed deals, spanning industries like biotech, pharmaceuticals, and manufacturing. We bring unparalleled expertise and insights to the table, helping you focus on what you do best—innovating.

Ready to elevate your licensing strategy? Reach out to Sosna + Co today and discover how our outsourced business development services can unlock new opportunities for your biotech company.

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Sosna + Co is a boutique, outsourced business development partner for the life sciences. From M&A advisory and licensing deals with Fortune 500 companies to uncovering the potential of savvy, new start-ups, the principal is simple: we work meticulously to uncover new opportunities that grow your business. Contact us today to learn more.

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Download Our Licensing Checklist

To help you navigate the complex licensing process, we created a free licensing checklist for life science companies. Download it to learn what criteria you need to successfully license your pharma or biotech asset in global markets.