Exclusive Licensing Gives Biologics CROs Major Advantage

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NEW YORK, April 26, 2019 /PRNewswire/ -- Biopharma companies rise and fall on the back of research and development. Success in the biopharma industry has always been about patents. The exclusive right to market life-saving treatments is how all the industry titans made their names. Johnson & Johnson (NYSE:JNJ) and Pfizer Inc. (NYSE:PFE) both amped up on R&D and the ensuing patents. As such, companies rise and fall on these developments, and can spend months, if not years, researching, developing, and testing a new compound. When they're successful, these major breakthroughs can be worth billions in revenue for those who commercialize these drugs. Many biopharma companies, such as, AbbVie Inc. (NYSE:ABBV), Thermo Fisher Scientific Inc. (NYSE:TMO), and ImmunoPrecise Antibodies Ltd (OTCQB:IPATF) (TSX-V:IPA), are hitting home runs in the pharmaceutical discovery process, which lands them lucrative and exclusive contracts with big pharma.

As major firms continue to search for new potential proprietary breakthroughs, they have begun to recognize the value in outsourcing this process to smaller, more specialized companies. Often focused on highly niche areas, these small research firms have succeeded in securing exclusive agreements with major institutions simply because their expertise is so hard to come by. In turn, a large number of lucrative breakthroughs have come as a result of these partnerships, with many CROs poised to explode in value thanks to their success.

The Changing Nature of the Biopharma Discovery Process

Decades ago, drug makers did their own discovery work almost entirely in house. In the past few years, however, outsourcing this process has become increasingly common. The rapid growth of various Contract Research Organizations (CROs) in the niche biopharma world has attracted most of the experts in these specialized areas. This means that major companies looking to jump into areas such as gene therapy, biologics, and other niche sectors are better off working with these firms rather than competing with them. Some CROs, such as ImmunoPrecise Antibodies Ltd (OTCQB:IPATF) (TSX-V:IPA), bring decades worth of specialized expertise that is almost impossible to compete with.