Recovering abandoned compounds through expanded external IP licensing

Pharmaceutical drug development costs have risen rapidly over the past twenty years. Yet, the number of new molecular entities being approved has not increased. Most of these costs can be traced to work on compounds that are abandoned before getting to market. As pharmaceutical companies scale back their work in light of deteriorating R&D productivity, significant unmet medical needs remain unaddressed. More extensive external licensing of the IP associated with abandoned compounds could spur recovery and/or redeployment of abandoned compounds to address at least some of these unmet medical needs. The example of Cubicin is offered as an illustration of these more open approaches. This article inductively develops a simple framework to guide companies in the decision of whether and when to license out unused internal IP.