Licensing, as is understood in plain terms, is the transfer of rights to a third party (the Licensee) to use the Intellectual Property owned by a party (the Licensor) for a fixed duration of time and under defined terms and conditions. The said terms and conditions may be, for ex., manufacturing and/or marketing rights in select geography, etc. Depending from whose perspective you see it, a licensing deal can be called an Out-Licensing deal or an In-Licensing deal. Out-Licensing means that the Licensor is ‘out’ – licensing his Intellectual Property to a third party. For the third party, the Licensee, who takes ‘In’ the Intellectual Property, it becomes an In-Licensing deal.
Lets look into the case of Glenmark’s research molecule –
Glenmark’s research molecule, GR 17536, is expected to have a market potential worth $1 billion. The company is in talks with a few multinational giants and a deal is likely in a couple of months. The molecule has already completed phase-II trials in Europe and India, the reports said. The deal partner will take the molecule through remaining processes.
Once the deal gets through, Glenmark will get milestone payment after completion of each phase of trials and will also get royalties and marketing rights for certain countries.