We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Inlicensing?

By Ken Black
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

In the research and development of many products, especially pharmaceuticals, the costs can be get extremely high, causing companies to have second thoughts about the possibility of developing a drug. Inlicensing takes risk away in any one of a number of different ways to mitigate some of the hazards associated with the product, such as a new drug. Inlicensing is something many of the phamaceutical companies, such as Pfizer, GlaxoSmithKline, Novartis and others look at on a regular basis.

Inlicensing is a partnership that develops between two companies that have shared intentions, goals or fields of interest. In the case of drug companies, these goals can be the research and development of a product, or perhaps its distribution. Inlicensing is so popular because it allows the expertise of each company to be used in a way that is very beneficial. Further, the profit sharing that happens between the two companies can be a very lucrative investment.

If Pfizer, for example, needed help developing a new cancer drug, it may turn to a smaller, lesser-known research firm and ask what they can help with. If the other firm believes there could be a mutually beneficial arrangement, the two may enter into an inlicensing agreement. Pfizer may help by providing facilities, other experts, materials and money. The other company will help by providing some capital of its own, as well as the researchers.

When the final drug is developed, goes through testing and is on the market, the companies will share in the profits of the venture through the terms laid out in the inlicensing agreement. In some cases, this agreement may sunset after a certain period of time, allowing one company to retain total licensing rights for a time, but ensuring the other company is able to recoup its investment, plus some additional pay. If a product is never developed and put on the market, then the inlicensing deal dictates they both share in the loss.

In other cases, an inlicensing deal may be struck with a pharmaceutical company for distribution in foreign countries. It may be that the pharmaceutical company with the rights to the medication does not have the network built up to properly introduce the product into a given country. Building that network would take time and resources, both of which would cost money. Instead, it may be better to allow a different company to handle the distribution. The drug may be marketed under either company's name, depending on the inlicensing agreement, and both share in the rewards.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By anon45244 — On Sep 15, 2009

Biopharmaceutical companies use active ingredients derived from biological substances or processes to manufacture conventional pharmaceutical dosage forms like tablets, capsules or liquids. Pharmaceutical companies manufacture pharmaceutical dosage forms using the active ingredients mainly derived from synthetic/ chemical origin. Apart from product contents all other things in both the cases remain same.

By bcenggirl — On Apr 16, 2009

What makes a biopharmaceutical company different from a pharmaceutical one?

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.