Co Promotion Agreement

Co-promotion agreements symbolize attractive options for less developed companies that want to control the purpose of their product, but these types of deal structures are much more complex than a company that takes full responsibility for development and marketing. [6] As a result, these cooperation agreements require comprehensive planning and detailed agreements and must take into account a number of critical factors, such as: in the initial phase, the average advance for co-financing could reach $18 million, with a potential royalty of 25%. In the performance phase, these payments have a probability of increasing to $53 million, with a maximum royalty average of up to 31%. It is considered an expensive option for in-Licenser, as payments are high, unlike co-marketing. [7] Although co-marketing is still valuable Although co-promotion attracts more companies than co-marketing because of its potential to significantly increase the effectiveness of salespeople, co-marketing offers more opportunities than expected. Co-marketing is particularly suitable for in-Licensers who face liquidity constraints due to the reduction in payments that the Out-Licenser expects to pay. In co-commercialization agreements at the beginning, the average maximum advance is $16 million and the license fee is about 18%. At the end of the license period, payments are also significantly lower than those of Co-Promotion, with advances of approximately $US 39 million and royalties of 24% of turnover. These results are presented in the figure and table below. The industry itself has complex production and, therefore, a less competitive market.

Therefore, these companies prefer to enter into co-promotion agreements, as they may be able to have a more stable, strategically privileged source of income. Co-promotion is also seen as an advantage for emerging companies in terms of capital injections, risk sharing for product development, and regulatory or market expertise. [8] Co-promotion agreements are often used by pharmaceutical companies to improve the marketing and penetration of products in certain countries. [9] Since the 2000s, co-promotion has played an important role in the pharmaceutical industry. . . .