The publication of this study marks the third consecutive year in which we have examined the prevailing terms available to biotech companies to address a pressing question they face: what to do with potentially valuable incoming royalty and milestone payments arising from out-licensed or otherwise transferred technology that may stretch far into the future?

If the company wants to accelerate those future payments to invest in its business now, a royalty monetization transaction provides a solution that blends aspects of asset sales and debt financings, in which an investor looks primarily to the product underlying the royalty stream as a source of repayment. A small subset of these transactions involve funding prior to regulatory approval or even the completion of clinical trials, which presents a distinct risk and return profile for investors.

In examining transactions completed in 2025 against prior trends, we observe that the royalty monetization market remained steady. This updated study reflects a market that is relatively mature, with a number of terms and practices that are widely, if not universally, accepted by buyers and sellers alike.

Because of the limited universe of companies that can engage in these transactions, royalty monetizations remain a smaller and less well understood market than other more conventional forms of financing. We have reviewed deals of this type involving commitments of at least $15 million entered into by biotech companies with equity listed on U.S. stock exchanges in the last seven calendar years (January 1, 2019 to December 31, 2025). As a separate segment of this market involves sellers that are not public filers (such as universities, non-profit organizations, inventors and private companies), and big pharma companies for which the underlying agreements are not of sufficient materiality for them to be publicly filed, this is necessarily only a snapshot of the market.

If you would like to learn more details about our study and this growing market, please feel free to reach out to our team.