Now that the patent cliff is behind us and the race to develop new blockbusters against key molecular targets is on, it is certainly time to take a step back and consider your patent portfolio and your filing strategy. With the US now operating on a first-to-file principle, there is no doubt left that filing a first application has now become an imperative. The question then is how to maximize the value of a patent portfolio?
There are three general options, which depending on the company’s business model, may be considered:
- Invest and further develop the IP assets;
- Partner the asset with a major player to mitigate the risk;
- Sell-off or out-license the asset and reap in the potential revenues and royalties;
Again, depending on the business model, the risks and the investment capital available, the decision will be made accordingly. In all three scenarios though, there is one common factor and that is increasing the value of the asset, in preparation for potential monetization.
While a first patent filing will generally be made in the country of origin, i.e. US, UK, EU, and Japan, the nature of the patent sector undoubtedly will lead to broader patent coverage via PCT and in many cases, via direct Paris Convention filings for non PCT members in countries or regions with high risk but promising market size, i.e. GCC and Pakistan.
Recent reports[1] and statistics[2] have identified MENA as a rapidly growing region with double-digit CAGR. This double-digit growth rate far out-distances the CAGRs of the usual markets, where a CAGR of less than 5%, in some cases nearly 1%, is reported for the equivalent period.
In the past decade and more, several industries have seen local development and growth in the MENA region. These include chemical and petrochemicals, pharmaceuticals (primarily generics) as well as some manufacturing related to FMCG. Some of the key markets in the region include Saudi Arabia, UAE, Iran, Egypt and Algeria.
The increasing number of patent applications being filed or entered in these countries by some of the world’s largest firms from various sectors is a clear indication of the interest in the region and specific countries. The noticeable improvement of patent prosecution and enforcement in the region is also an indication of the region’s readiness for investments and further developments from foreign firms and local investors.
What does this mean for SMEs? It means that seeking IP protection in the MENA region has to be evaluated when developing their IP strategy. This will certainly have implications on the IP budget, but it is clear the return on investment on a larger IP investment will be higher, especially when negotiating licensing deals and agreements or when being valued for a potential merger or sale.
[1]Amid Challenges, MENA Emerges as Growing Biopharma Market, A BioWorld Special Report, 2015.
[2] Global Outlook for Medicines through 2018, IMS Institute for healthcare Informatics, November 2014.
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